Mumbai: Beleaguered Coffee Day Enterprises Ltd.’s sale of its technology park to Blackstone Group Inc. is stalled as one of its creditors hasn’t approved the deal, people with the knowledge of the matter said.
Yes Bank Ltd. hasn’t issued the so-called no objection certificate as it’s seeking assurances on repayments of other loans taken by Coffee Day, said the people, asking not to be identified as the information isn’t public. All other creditors have approved the transaction, the people said.
Shares of Coffee Day extended decline to as much as 14.5% in Mumbai, which is the biggest drop since July 31.
Coffee Day, which runs India’s largest coffee chain, has been trying to sell its assets to repay its debt after the unexpected death of its founder billionaire V.G. Siddhartha. On Aug. 14, the company announced that it has entered into a non-binding letter of intent to sell Global Village Tech Park to Blackstone in a deal valued at 26 billion rupees ($366 million) to 30 billion rupees.
Tanglin Developments Ltd., a unit of Coffee Day that controls Global Village Tech Park in Bangalore, owes Yes Bank about 1 billion rupees, according to the people. In addition, Coffee Day also owes the lender about 14 billion rupees, the people said.
Yes Bank could eventually approve the transaction, one of the people said. Representatives for Blackstone, Coffee Day and Yes Bank declined to comment.-Bloomberg