Coffee Day Global appoints EY for due diligence of coffee business

BENGALURU: Coffee Day Global, the unit that manages the coffee business of Coffee Day Enterprises Ltd, (CDEL) said it appointed EY Restructuring LLP to provide interim business support services and do preliminary due diligence for investment proposals in the company.
CDEL has been in talks with private equity firms like KKR, TPG Capital and Bain since last year to sell stake in its coffee retail business, which operates 1,469 cafes and 59,400 vending machines.
The company has been looking at various ways to pare its mammoth debt since founder VG Siddhartha committed suicide last year citing pressure from lenders. That included a Rs 2,000 crore deal with private equity giant Blackstone to sell its IT park in the outskirts of Bengaluru.
TOI reported in March that Siddhartha’s family has put most of its personal assets, including 10,000 acres of plantations, for sale to repay lenders and to address the fallout of the investigation into his suicide. A complete sell out is likely to fetch about Rs 2,000 crore.
The promoters, which also include Siddhartha’s wife, hold 16.4% of the company as of March 31, down from 54% a year earlier, as banks invoked a substantial portion of their pledged shares after it defaulted on payments. Shares of the company were suspended from trading since February after it failed to disclose unaudited financial results before the prescribed deadline.
The appointment of EY comes on the heels of CDEL also appointing IDFC Securities in November to evaluate strategic options for the company including divestment of its holding in Coffee Day Global (CDGL) and other group companies, excluding Sical Logistics.