NEW DELHI: Shares of Coffee Day Enterprises jumped 5 per cent in Friday’s trade after the Coffee Day Group entered into the definitive agreement with the Chennai-based Shriram Group to sell one of its financial services units, Way2Wealth Securities, for an undisclosed sum.
The move is seen as a part of Coffee Day’s efforts to cut debt and shore up resources for working capital by disposing non-core assets.
The company informed exchanges about the development post market hours of Thursday. On Friday, the stock hit 5 per cent upper circuit limit at Rs 33.80 on BSE.
Shriram Capital, the holding company for the group’s large nonbanking finance and insurance businesses, is said to be conducting due diligence on the proposed deal. The transaction may fetch Coffee Day Enterprises about Rs 30 crore, people briefed on the matter said.
The transaction will “help in further deleveraging the Coffee Day Group and ensure smooth operations while safeguarding the interests of all stakeholders including investors, lenders, employees and customers,” Coffee Day Enterprises said in a note to the stock exchanges on Thursday.
Way2Wealth Securities is one of three remaining CDEL subsidiaries. The other financial services firms — Way2Wealth Capital and Way2Wealth Enterprises — will remain with CDEL for the time being. The holding company sold its algo high-frequency trading arm, AlphaGrep Securities, in September last year. An email query to Shriram Capital did not elicit a response as of press time.
Source: Economic Times
