The deal is expected to be announced as soon as today and the payment by Blackstone will be done in multiple tranches. The first tranche of Rs 2,000-2,200 crore will be paid in four weeks of the deal closing while the remaining money will come in the next 24 months, said the source mentioned above.
“The deal is being done through a special purpose vehicle where Blackstone will own about 90% and the remaining 10% will be held by Salarpuria,” said the source.
“The Board of Directors of the company…discussed methods of deleveraging the group. Towards the objective of deleveraging the board discussed and approved the disinvestment of Global Village Tech Park in its subsidiary, Tanglin Developments Ltd, in favour of Blackstone,” Coffee Day said in a BSE filing later in the day.
“The transaction valuation is about Rs 2600-3000 crore and the company has entered into a non-binding letter of intent. The transaction closure is subject to completion of Blackstone’s due diligence, documentation and receipt of requisite regulatory approvals, which is expected in the next 30-45 days,” the company added.
TOI had reported in March that Blackstone-Salarpuria is in talks to buy the technology park for Rs 2,800 crore. The talks were put on hold by VG Siddhartha as he started focusing on the sale of flagship coffee retail chain business to Coca-Cola and ITC, but was revived last month.
Interestingly, Blackstone has agreed to pay a higher price than it was negotiating for earlier, said the source involved in the transaction.
The money will be used to repay debt, including that held under Tanglin, which is a subsidiary of listed Coffee Day Enterprises.
The tech park, Global Village, is a 4-million-sqft (square feet) tenanted office space located on a 120-acre campus with clients like Mphasis, Accenture and Mindtree. Global Village has a potential to add another 5-6 million-sqft as now using only 45 acres of the land parcel. It fetches average rentals of Rs 40-50 per sqft, lower than the bustling office corridor of the Outer Ring Road (ORR) due to its location.
Further, the Coffee Day board also provided in-principal approval for disinvestment in its step down subsidiary AlphaGrep Securities Pvt Ltd in favour of Illuminati Software Pvt Ltd for an approximate amount of Rs 28 crore.
“The above mentioned transactions will significantly help in deleveraging the Coffee Day Group, and ensure smooth operations while safeguarding the interests of all stakeholders, including investors, lenders, employees and customers,” the company stated.