The Tata Group is facing a roadblock to buy a Cafe Coffee Day unit, one of India's most popular coffee chains, beverage vending machine business after two big lenders to the Coffee Day Group has objected to the deal. Two banks including Yes Bank and Rabobank, have demanded a full repayment of the loans that were disbursed to Coffee Day Global Ltd before giving a No-Objection Certificate (NOC) to the proposed deal.
According to livemint.com, Tata Group and CDGL proposed deal would need an NOC from 14 lenders. While most of the lenders have agreed, two lenders including Yes Bank and Rabobank are demanding a full repayment of the dues. Tata Consumer Product Ltd proposed to buy Coffee Vending Business from CGDL for at least Rs 1,000 crore.
As per livemint reports, an official in knowledge of the matter said the lenders have to realise that if a deal to sell the coffee vending business is delayed or doesn't get through at all then they may be forced to take a larger haircut or even a complete loan loss.
Back in July, asserting that she was committed to the future of Coffee Day Enterprises Ltd (CDEL), its director and founder VG Siddhartha's widow, Malavika Hegde has said that she will work to bring down its debt to a manageable level by sale of some more investments.
"I am resolutely committed to the future of Coffee Day as a going concern... We think that we can bring that (debt) to a more manageable level with our plans to sell a few more of our investments shortly," said Hegde in an open letter to the company's 25,000 employees on Friday. According to Hegde, the company's debt has been brought down from Rs 7,200 crore to Rs 3,200 crore.