An online hospitality company OYO and British private equity firm Apax Partners are in talks to buy stake in Cafe Coffee Day (CCD), according to an economic times report. According to reports, the two signed confidentiality agreements. This development comes after it was reported after talks by KKR, TPG Capital and Bain Capital to buy a stake in the main coffee shop.
Sources told that the bids were evaluated, and the board began negotiations with two of the five bids. "There were five offers and they all are evaluated, but we will get some clarity only after a few days," the source said.
OYO is not new to space and has already opened two coffee shops called French Press. It ventured into the coffee business after venturing into two cloud kitchens: Adraq and O'Biryani. The report pointed out that Oyo is looking to expand its coffee business and that the output of CCD could give it a boost.
There were talks to sell CCD even before the death of the brand's founder, VG Siddhartha. At the time of Siddhartha's death in July, Coffee Day Enterprises, the dominant company of Coffee Day, had a total debt of about Rs. 6,550 crore as of March 2019, which he was trying to reduce.
Image Source: The Economic Times
In March, Siddhartha sold its total 20.32% stake in Mindtree to L&T for about Rs 3,200 crore, which was used to reduce a portion of Coffee Day's debts.
Siddhartha held talks with the Coca-Cola Investment Company, but that did not work. After Siddhartha's death, the Coffee Day meeting continued with the Tata Group, the Jatia family, ITC and Coca-Cola. None of these parties participated in the tender.
Coffee Day's business consists of a Cafe Coffee Day retail chain, 54,000 vending machines and 500 stores selling fresh coffee beans and ground powder. Coffee Day Enterprises reported revenue of Rs.4,264 million for the financial year ended March 31 this year, an increase of 13% over the previous year, and profit of Rs 128 crore, up 21%. From the previous fiscal year.
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