Tag: ccd

Lenders many send Coffee Day to NCLT for debt resolution, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The creditors to Coffee Day Enterprises Ltd (CDEL), which owns and operates the Cafe Coffee Day chain, may send the company to the National Company Law Tribunal (NCLT) for debt settlement following the firm’s announcement that it had defaulted on its loans in the March 2021 quarter, Business Standard reported on Thursday.

According to CDEL’s exchange filing for the March quarter, the company’s outstanding debt stood at Rs 280 crore, it said. The liquidity crisis, the company said, was the reason behind the delay in payments. Its total debts stand at Rs 518 crore, the CDEL said.

In July 2020, the company announced the shutdown of 280 outlets in the first quarter of that fiscal year due to profitability issues and an anticipated increase in future expenses. Following these closures, the number of outlets stood at 1,480 as of June 30 last year, according to a PTI report in Mint.

Earlier this year, the homegrown care retail chain entered what was referred to as the “strategic alliance” with Premium waffle brand London Bubble Co (LBC). As a part of the alliance, the LBC will open 150 shop-in-shops in CCD, an attempt towards generating incremental revenue even as the pressure to repay debts mounted.

This shop-in-shop business model with CCD will also help the LBC expand its footprint in India. The LBC-CDEL partnership was said to be the largest of its kind in the country.

Besides the cafe chain, the CDEL is also said to be one of the largest exporters of green coffee in India. They have been involved in the export business since 1999 and their products go to the Middle East, Europe, and Japan.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Café Coffee Day enters into strategic partnership with waffle brand London Bubble Co.

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Waffle brand London Bubble Co. has entered a strategic alliance with Café Coffee Day, a homegrown retail cafe chain. LBC’s shop-in-shop business model with CCD will enable it to scale up it’s footprint in the country across 150 outlets of CCD’s café network.

CCD joined hands with Wow! Momo Foods in June last year and as part of the partnership, Wow! Momo planned to set up kiosks at Café Coffee Day outlets.

Vinay A. Bhopatkar, CEO of Café Coffee Day, said, “Waffles have emerged as the Instagram generation’s one of the most loved dessert in recent times, indicating a tremendous shift in the urban Indian sweet palate. We are positive that this partnership will add another interesting inclusion to the CCD menu, giving our patrons more reasons to visit their favourite café.”

Launched in 2017, London Bubble Co., which counts 74 outlets spanning across 10 states, has now been acquired by real estate and facility management company Realta Ventures.

Mustakeen Sheikh, CEO and Promoter at Realta Hospitality, said, “We are delighted to include London Bubble Co. under Realta Ventures’ portfolio. We’ve entered into a distinctive position in an evolving market segment with strong prospects for growth.”

He added, “Our partnership with Café Coffee Day is one such way to make inroads into new markets and bridge the gap between urban and non-urban population with pocket-friendly desserts that perfectly pair with coffee, all under the same roof.”

Co-founded by Mustakeen Sheikh and Darshan Shetty in December 2014, Realta Ventures is a facility management, service and operations company with a distinctive repertoire of properties under their robust development portfolio. The company is headquartered in Mumbai with a pan-India presence, operating across cities in six diversified business sectors.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI’s June 7 circular: Banks to see impact as 210-day deadline ends

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Starting the January-March quarter, banks will begin to see the impact of the Reserve Bank of India’s June 7 circular, in the form of higher provisioning for stressed accounts that have not found resolution thus far.

The 210-day deadline, including 30 days allowed under “review period” when a borrower first defaults and the subsequent 180-days allowed for implementing a resolution plan, ended in the first week of January for the first set of accounts that were stressed when the circular was introduced in June last year. For such accounts, banks will now be required to set aside an additional 20 percent provision for the delay caused in resolving stress.

RBI’s “Prudential Framework for Resolution of Stressed Assets”, or the “June 7 circular” as it is more popularly called, mandates banks to recognise stress, and initiate a review of default within 30 days (review period). Banks are allowed 180 days’ time after the 30-day review period ends to implement a resolution plan, failing which they have to hold higher provisioning of 20 percent as a punitive measure, and another 15 percent on top of the additional 20 percent if the resolution is stalled for over 365 days. This is applicable for all large accounts which have a system-wide exposure of over Rs 2,000 crores effective June 2019 and for all accounts over Rs 1,500 cr effective January 2020.

Dewan Housing Finance Limited is one of the largest such accounts that fall under the ambit of the circular. Financial creditors have made claims of over Rs 86,800 crores against DHFL, with State Bank of India’s exposure claim (including SBI Singapore) at Rs 10,082 cr, Bank of India’s at Rs 4,125 cr, Canara Bank’s at Rs 2,681 cr, Union Bank of India’s at Rs 2,378 cr, Syndicate Bank’s at Rs 2,229 cr, and Bank of Baroda’s at Rs 2,074 cr and so on.

A senior official at one of these banks told CNBC-TV18 that most banks have already classified DHFL as a non-performing asset and set aside 15 percent for it as per RBI’s Income Recognition and Asset Classification (IRAC) norms. With the 210 day deadline under the June 7 circular lapsing in January, banks will now be required to set aside an additional 20 percent provisioning for the account, taking the total provisioning to 35 percent.

However, the June 7 circular stipulates that “Where resolution is pursued under IBC – half of the additional provisions made may be reversed on the filing of insolvency application and the remaining additional provisions may be reversed upon admission of the borrower into the insolvency resolution process under IBC.” In the case of DHFL, which has now been admitted under the Insolvency & Bankruptcy Code (IBC), it remains to be seen if banks may be allowed to reverse the provisioning.

Coffee Day Enterprises, or CCD, with over Rs 4,970 crores of debt is another case that falls under the ambit of this circular, as is CG Power where the debt to domestic lenders stands at over Rs 2,300 crores, Altico Capital with Rs 4,300 cr, Cox & Kings at Rs 3,200 cr are a few others where the impact will be seen in the March quarter by banks.

While the exact number of accounts and their exposure couldn’t be immediately ascertained, a large number of accounts where Inter Creditor Agreements (ICA) have been signed under the June 7 circular in the first quarter remain unresolved, and may, therefore, face higher provisioning.

For instance, as per State Bank of India’s analyst presentation for the June quarter, there were 18 non-performing accounts with Rs 29,136 cr of exposure where the ICA was either signed or likely to be signed. SBI had a provision coverage of 52.1 percent against these 18 accounts, which means it has already provided more than the required level under June 7 circular.

However, SBI also disclosed that it had lent to 20 borrowers who were still classified as standard accounts as of the June quarter, with aggregate exposure of Rs 19,142 crores. Against these 20 standard accounts, SBI disclosed that it had only made a 14.6 percent provision coverage. For these accounts, SBI will have to set aside another 0.4 percent as per IRAC norms and the additional 20 percent under RBI’s June 7 circular in the March quarter, assuming it hasn’t already increased the coverage for these accounts in the quarter gone by, the results for which are yet to be disclosed.

Other banks, similarly, would have to also increase provision coverage for large accounts of over Rs 2,000 crores which were stressed as of June 2019 in the March quarter.

So while banks are starting to recover dues from large accounts like Essar Steel, and Ruchi Soya under the IBC, the additional provisioning that kicks in the March quarter under the June 7 circular may just prove to be a dampener.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oyo backs out; KKR, Apax Partners in race to buy stake in Café Coffee Day, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After three others including Oyo backed out, private equity firms KKR and Apax Partners were the only ones left in the race to buy a significant stake in Café Coffee Day (CCD), The Economic Times reported.

The report, citing three people familiar with the matter, said that SoftBank-backed hospitality chain Oyo was interested only in the CCD brand which its owner Coffee Day Enterprises Ltd (CDEL) was unwilling to offer.
TPG Capital and Bain Capital opted out mainly due to differences over valuation, it said.

Former Central Bureau of Investigation official Ashok Kumar Malhotra was looking into a letter that CCD founder VG Siddhartha wrote to the board, two days before he went missing. Siddhartha was found dead on July 31, 2019. The company’s board is expected to speed up talks with investors once the investigation report is submitted, the report said.

The company was struggling to run its operations after the death of Siddhartha. CDEL’s debt was at Rs 4,970 crore.

CCD has 1,480 outlets nationally and it is the largest food and beverage network in the country, even after shutting 280 stores to improve profitability.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Coffee Day Group to continue focusing on financial health, says board at AGM

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Coffee Day Group held its first Annual General Meeting after the demise of founder VG Siddhartha, and the company’s board reiterated its focus on financial health as the group tries to deleverage and reduce debt.

“Financial health has been identified as one of the key agenda for the next three years as we embark on our journey of strong but sustainable growth. We thank the Centre and State Government for their exceptional support in keeping Coffee Day as a going concern, and protecting about 30,000 jobs in very difficult circumstances,” SV Ranganath, Director, and Interim Chairman said at the meeting held over the weekend. 

Others who led the AGM along with Ranganath were Nitin Bagamane, Chief Operating Officer, Malavika Hegde, Director, and R Ram Mohan, Chief Financial Officer.   

“Coffee Day Group is very confident of the future ahead in spite of the recent slowdown in consumption story. We will continue to strengthen the much-loved Coffee Day brand, build on our relationships with the millennials by offering newer, more relevant and a wider choice of products. To continue our expansion of business, your Board of Directors as recommended by the executive committee are exploring options of having suitable business/ financial partners for rapid and aggressive growth of the business and fully tap market opportunities,” the interim chairman said. 

Ranganath said the company was progressing in reducing debt by monetising non-core-assets and sale of some group companies. He added that the Group is also awaiting the investigation report by Ashok Kumar Malhotra, retired DIG of CBI, who was roped in to investigate the circumstances leading to the statement made in the letter of the former VG Siddhartha and to scrutinize the books of accounts of the company and its subsidiaries. 

The café business has been performing well and it will continue to drive growth with new products, enhanced services, and relevant partnerships, the Group said in a press statement. 

Coffee Day Group said that same-store sale growth (SSSG) increased from 7.23 percent in FY18 to 9.55 percent in FY19.

The group also mentioned the different business initiatives over recent years, including the launch of home delivery through a partnership with Uber Eats to launch virtual restaurant brands, Indus Plus, the company’s new-age IoT-enabled Android-based touch screen machine.

CCD had entered a new retail segment last year through a subsidiary, with a 51 percent stake, with Impact HD Inc. from Japan to set up a chain of convenience stores in India to expand its Fresh & Ground (F&G) business. About 425 retail outlets have been transferred to this subsidiary to be remodeled into a chain of retail stores that will go by the brand name Essentials.

“Work is currently underway to develop this brand into an around-the-clock, go-to store for food and beverages (F&B) and convenience products. I see this as the perfect opportunity for us to launch yet another national brand, starting out from the largely local outlets of F&G. The partnership also leverages our retail understanding of the Indian market with the global expertise of Impact HD Inc. in retail business,” Ranganath said at the AGM.

Coffee Day Group’s debt stood at Rs 4,970 crore in July. VG Siddartha had moved to sell his entire stake in Mindtree, a company he had first invested in 1999, and the transaction was concluded on May 3, 2019. The proceeds net of expenses and tax of Rs 2,100 crore have been utilized for the reduction of debt, the Group said. Coffee Day’s subsidiary Tanglin Development also entered into an agreement with Blackstone Group and Salarpuria Sattva Group for offloading its Tech Park, Global Village in Bengaluru. 

The transaction is at an enterprise value of Rs 2,700 crore. The closing of the transaction is subject to completion of precedent conditions including receipt of regulatory approvals, and a major part of the sale proceeds is planned to be utilized for bringing down the debt, the executives said.

The Group said the board of directors of Sical Logistics is also exploring various options of divestment of its assets including a portion of stake sale to strengthen its liquidity.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

YES Bank softens stance; likely to approve Coffee Day-Blackstone deal, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a major relief to Coffee Day Enterprises (CDEL), the group’s largest creditor YES Bank is expected to give approval for proposed sale of Global Village Technology Park to private equity firm Blackstone Group, according to a Business Standard report.  Earlier, the private sector lender had expressed its reservation in giving approval to the Rs 2,800-crore deal.

According to the report, YES Bank has softened its stance and decided to render the ‘no objection’ to the Bengaluru-based firm’s decision to the deal. A formal letter of approval is expected to reach Coffee Day Group in the next two-three days, the report said citing sources.

The Group is trying to sell its 90-acre tech park on the outskirts of Bengaluru for repaying debts of Cafe Coffee Day’s (CCD) associate firms and their promoters after its founder V.G. Siddhartha committed suicide in July.

YES Bank is the single-largest lender to the group and its promoters. It has an exposure of at least Rs 1,500 crore to Coffee Day Group firms and their promoters. The company has about $1 billion debt burden on it.

Earlier, YES Bank had reportedly put a condition that it will give its “no objection” to the deal only if Coffee Day agrees to repay the entire loan taken by the group from the bank.

YES Bank, which is dealing with its own liquidity crunch, is the only creditor which has not yet approved the deal with the private equity giant.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oyo among 30 players to sign NDA with Cafe Coffee Day; Travis Kalanick also seeks a sip

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Hospitality chain Oyo is interested in buying a stake in Cafe Coffee Day (CCD) and has signed a non-disclosure agreement (NDA) with Coffee Day Enterprises Limited (CDEL), sources say.

Oyo is among 30 players who have signed NDAs with CCD so far over the past few weeks. Uber founder Travis Kalanick had also expressed interest in CCD a few months ago, according to sources, as he moved into the cloud kitchen business post his stint at Uber. Kalanick’s team had initiated talks earlier this year, but the talks did not progress after CCD founder VG Siddartha’s demise.

CDEL has signed NDAs with around 30 players over the last few months, including the likes of TPG, Bain, KKR, Coca Cola and ITC, as per sources. However, most of these talks are at very preliminary stages, including Oyo’s, as the company is awaiting the investigation report on VG Siddartha’s purported suicide letter and the Coffee Day Group’s debt.

Plan to expand F&B business

Oyo’s interest in CCD comes as part of its plan to expand its F&B business, people in the know said. “Acquisition of CCD can help Oyo move beyond cloud kitchens to F&B retail outlets,” a source said.

Oyo’s cloud kitchen brands include Paratha Pundit, OBiryani and Adrak. Oyo has also recently entered the coffee business with coffee chain, The French Press, and plans to launch more outlets beyond a couple of them it has started in cities such as Delhi and Bengaluru.

Both Oyo and CCD said they will not comment on speculations.

The Coffee Day Group has been in talks for divestment across its assets since earlier this year as it looks to cut down its debt. Siddartha and CCD sold their entire stake in Mindtree to L&T, and also sold the Global Village tech park in Bengaluru to Blackstone for Rs 2,700 crore. Coffee Day Group’s debt as on July 31 stood at Rs 4970 crore.

CNBC TV 18 reported earlier this month that the Coffee Day Group was closing down hundreds of its CCD cafes in order to cut costs and boost profitability. As many as 500 CCD outlets have been shut across the country since April 2019, bringing the number to a little over 1,200 outlets.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oyo joins the race to buy stake in CCD, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oyo and British private equity firm Apax Partners are in talks to buy stake in Cafe Coffee Day (CCD), sources told The Economic Times.

The development, the report said, comes after both Oyo and Apax signed nondisclosure agreements (NDAs) with Coffee Day Enterprises (CDEL) and have started discussions to buy the group’s coffee business.  Earlier similar agreements were made by KKR, TPG Capital and Bain Capital with Coffee Day Enterprises.

“There have been five bids and all are being evaluated, but we will get some clarity only after a few days. There is a lot to consider for the company (CDEL) as all these people (potential investors) have different plans for CCD,” a source was quoted as saying in the report.

The development also makes Oyo is the only strategic investor to have made such a bid, the report said. This comes as Oyo, which had launched its coffee chain ‘The French Press,’ is looking to expand its operations across the coffee outlet segment.

The development is expected to give boost to CCDs divestment attempts. The coffee chain had closed down 500 of their outlets since April, in order to arrest the falling profitability of its coffee business.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow