Yes Bank is yet to sign off on the letter of approval for the Coffee day Group to sell one of its assets, Global Village Technology Park to the US company Blackstone Group Llp. It is reportedly holding back the approval letter for the sale of the asset until CDEL repays the entire amount owed to the bank.
The deal between the companies is a few months old already and the funds generated out of this deal were to be used by Coffee Day Enterprises Limited, CDEL, the holding company, to pay the outstanding debts.
Yes Bank is reportedly one of the largest lenders to the Coffee Day Group and the total exposure is said to be Rs 1,500 crore. A Livemint report states that Yes Bank wants CDEL to pay its entire dues or at least the ones outstanding in the accounts of Tanglin Developments and Sical Logistics. The amounts on these two accounts are said to be Rs 100 crore and Rs 50 crore respectively.
To trace back the story, after the death of the founder of the Coffee Day Group VG Sidhartha, it was revealed that the group companies were reeling under huge debts. The interim management committee that started looking after the affairs of the company took a decision to sell off some assets to partly settle the debts and partly to fund the working capital requirements of the businesses which were inherently profitable, like Café Coffee Day. One of the first assets chosen to be put on the block was the technology park on the outskirts of Bangalore.
The Global Village Technology Park is a 90-acre plot and is a unit of Tanglin Developments Limited. The deal was then struck with the Blackstone Group and the deal was worth Rs 2,800 crore. The understanding was that Rs 2,000 crore would be released to the various creditors and the balance retained for the working capital requirements. Now, this would have meant satisfying each creditor by releasing funds in some kind of a proportion.