A definitive agreement for investment in GV Techparks Private Limited which is a wholly-owned subsidiary of group company Tanglin Development Ltd (TDL), has been executed between Coffee Day Enterprises Ltd (CDEL) and entities belonging to Blackstone Group and Salarpuria Sattva Group at an enterprise value of Rs 2,700 crore.

deal to bring down debt level of CDEL

According to a CDEL statement, this transaction is expected substantially bring down debt level of group which was earlier disclosed on August 17, as Rs 4,970 crore, CDEL said in a statement. It furr stated,  " rationale for sale is to focus on its core business and reduce debt of Coffee Day Group"

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According to a media report, transaction is proposed to take place in two tranches. first tranche that is expected to be completed on or before October 31, will be worth Rs 2,000 crore and subsequent tranche is expected to be of Rs 700 crore.

completion of transaction, however, depends on transfer of Global Vill TechPark asset from TDL to GV Techpark. transaction which is at an enterprise value of Rs 2,700 crore, is subject to certain closing justments.

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ditionally, closing of transaction is also subject to completion of conditions precedent including receipt of regulatory approvals, CDEL said. This deal happens to be first major divestiture by CDEL. company has also been in talks to sell its logistics subsidiary Sical and flagship retail business Cafe Coffee Day. deal is reportedly being stuck through a special purpose vehicle. Blackstone is expected to own 80 per cent part in deal while remaining will be taken up by Salarpuria.

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CDEL has been in trouble after founder's death

company has gone down tough ro and has been in trouble after its founder V G Siddhartha allegedly took his own life owing to debt strains in his company. Since his death, CDEL has been trying to divest its assets to pare debts.

On July 30, CDEL informed stock exchanges about Siddhartha's disappearance. In a letter that was purportedly written by him, Cafe Coffee Day founder said: "I could t take any more pressure from one of private equity partners forcing me to buy back shares." 

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(With ANI Inputs)