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Blackstone’s buyout of Coffee Day’s tech park stalls; stock slips nearly 9%

Beleaguered Coffee Day Enterprises Ltd.’s sale of its technology park to Blackstone Group Inc. is stalled as one of its creditors hasn’t approved the deal, people with the knowledge of the matter said.

Yes Bank Ltd. hasn’t issued the so-called no objection certificate as it’s seeking assurances on repayments of other loans taken by Coffee Day, said the people, asking not to be identified as the information isn’t public. All other creditors have approved the transaction, the people said.

Shares of Coffee Day on BSE fell 8.9% to close at 43.85. The stock dropped as much as 14.5% earlier on Monday in its biggest intra-day decline since 31 July.

Coffee Day, which runs India’s largest coffee chain, has been trying to sell its assets to repay its debt after the unexpected death of its founder billionaire V.G. Siddhartha. On 14 August, the company announced that it has entered into a non-binding letter of intent to sell Global Village Tech Park to Blackstone in a deal valued at 2,600 crore ($366 million) to 3,000 crore.

Tanglin Developments Ltd., a unit of Coffee Day that controls Global Village Tech Park in Bangalore, owes Yes Bank about 100 crore, according to the people. In addition, Coffee Day also owes the lender about 1,400 crore, the people said.

Yes Bank could eventually approve the transaction, one of the people said. Representatives for Blackstone, Coffee Day and Yes Bank declined to comment.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Source: Livemint