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Coffee Day Enterprises clarifies debt position, says all obligations will be honoured

Aug 18, 2019

Coffee Day Enterprises Ltd (CDE) said on Saturday that total debt of the Coffee Day Group stands at Rs 4,970 crore and all obligations to the lenders will be honoured.

Of the total amount of debt, Rs 4,796 crore is under secured loans and the rest Rs 174 crore under unsecured loans. The company has already announced divestment of Global Village Tech Park held by its subsidiary Tanglin Developments Ltd for an aggregate consideration of Rs 2,600 crore to Rs 3,000 crore.

"On receipt of the consideration for the sale of Global Village after payment of required statutory payments, the debt position of Coffee Day Group will reduce around by Rs 2,400 crore," Coffee Day Enterprises said in a regulatory filing.

The debt position of Coffee Day Group (excluding Sical Logistics and Magnasoft Consulting) post repayment of debt out of proceeds from the sale of Global Village is expected to be around Rs 1,000 crore in the next 45 days. "The company expected to have a comfortable position to service the reduced debt obligations," Coffee Day Enterprises added.

Sical has been working on divestment of certain assets. The proceeds from the divestment are expected to significantly reduce the debt in Sical.

"The company is confident that the ongoing divestments will significantly reduce the debt position of Coffee Day Group. The financial position and asset base of the Coffee Day Group will be comfortable to service the debt obligations of the entire group in full," it said.

"We reiterate that the debt obligations of the Coffee Day Group will be honoured. We request all the lenders and creditors to give sufficient time to honour the commitments and to unlock the true potential value of the assets. We thank on behalf of 50,000 employees, for whom the Group has provided employment (direct and indirect)."

CDEL founder and owner VG Siddhartha's body was found on July 31 after search operations near Mangaluru in Karnataka. In a letter written by the enterprising coffee baron, he apologised for letting down people and cited pressure from private equity investors and harassment by tax authorities.

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