Hospitality chain Oyo is interested in buying a stake in Cafe Coffee Day (CCD) and has signed a non-disclosure agreement (NDA) with Coffee Day Enterprises Limited (CDEL), sources say.
Oyo is among 30 players who have signed NDAs with CCD so far over the past few weeks. Uber founder Travis Kalanick had also expressed interest in CCD a few months ago, according to sources, as he moved into the cloud kitchen business post his stint at Uber. Kalanick's team had initiated talks earlier this year, but the talks did not progress after CCD founder VG Siddartha's demise.
CDEL has signed NDAs with around 30 players over the last few months, including the likes of TPG, Bain, KKR, Coca Cola and ITC, as per sources. However, most of these talks are at very preliminary stages, including Oyo's, as the company is awaiting the investigation report on VG Siddartha's purported suicide letter and the Coffee Day Group's debt.
Plan to expand F&B business
Oyo's interest in CCD comes as part of its plan to expand its F&B business, people in the know said. "Acquisition of CCD can help Oyo move beyond cloud kitchens to F&B retail outlets," a source said.
Oyo's cloud kitchen brands include Paratha Pundit, OBiryani and Adrak. Oyo has also recently entered the coffee business with coffee chain, The French Press, and plans to launch more outlets beyond a couple of them it has started in cities such as Delhi and Bengaluru.
Both Oyo and CCD said they will not comment on speculations.
The Coffee Day Group has been in talks for divestment across its assets since earlier this year as it looks to cut down its debt. Siddartha and CCD sold their entire stake in Mindtree to L&T, and also sold the Global Village tech park in Bengaluru to Blackstone for Rs 2,700 crore. Coffee Day Group's debt as on July 31 stood at Rs 4970 crore.
CNBC TV 18 reported earlier this month that the Coffee Day Group was closing down hundreds of its CCD cafes in order to cut costs and boost profitability. As many as 500 CCD outlets have been shut across the country since April 2019, bringing the number to a little over 1,200 outlets.
First Published: Nov 25, 2019 4:57 PM IST
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