Blackstone pays first tranche of Rs 150 cr for acquiring Coffee Day's technology park, remainder to be paid in a year

US private equity giant Blackstone Group Inc. reportedly paid the first tranche of Rs 150 crore to Coffee Day Enterprises as part of acquiring the coffee venture’s Bengaluru-based Global Village Tech Park. Blackstone will pay another Rs 2,000 crore in the next two weeks for the technology park and the remaining amount of Rs 550 crore is expected to be paid in a span of one year, said a report in Business Standard. The deal values the technology park at Rs 2,700 crore. [caption id=“attachment_2492804” align=“alignleft” width=“380”] Representational image. Reuters[/caption] With this Blackstone payout, it is expected that Coffee Day Enterprises’ (CDEL)  working capital situation may improve. A majority of the proceeds are expected to be utilised to bring down the overall debt of the company, the report said. In January this year, the Bengaluru-based coffee chain had cleared all the major hurdles including government approvals and a green signal from most of its lenders. Last month, the Commerce Ministry had cleared the proposed deal and this was necessary since the 90-acre IT-focussed tech park comes under the special economic zone (SEZ) regulations, said a report in The Economic Times. Private lender Yes Bank issued a no-objection certificate, the report said. Tanglin Developments, a group subsidiary and the park’s promoter, owes the bank Rs 100 crore. In December last year, Coffe Day’s plans to sell its Global Village Technology Park to Blackstone Group hit a hurdle after its largest creditor Yes Bank reportedly did not give its approval to the deal. The deal got stalled after Yes Bank reportedly put up a condition that “no objection" would be given to the deal only if Coffee Day is ready to repay the entire loan taken by the group from the lender or at least the loans taken by Coffee Day’s arms—Tanglin Developments (which owns the tech park) and Sical Logistics. The CCD group’s debt was reported at Rs 7,100 crore in April 2019 but it had come down to Rs 4,980 crore after the sale of a 20.41 percent stake in Mindtree to engineering and construction conglomerate Larsen and Toubro in May this year. In July last year, Coffee Day Group promoter VG Siddhartha was found dead in Netravati river near Mangaluru in Karnataka two days after he had gone missing. In a letter purportedly written by him, Siddhartha mentioned severe financial stress being faced by his group firms, among other issues. — With PTI inputs