The Coffee Day Group held its first Annual General Meeting after the demise of founder VG Siddhartha, and the company's board reiterated its focus on financial health as the group tries to deleverage and reduce debt.
"Financial health has been identified as one of the key agenda for the next three years as we embark on our journey of strong but sustainable growth. We thank the Centre and State Government for their exceptional support in keeping Coffee Day as a going concern, and protecting about 30,000 jobs in very difficult circumstances," SV Ranganath, Director, and Interim Chairman said at the meeting held over the weekend.
Others who led the AGM along with Ranganath were Nitin Bagamane, Chief Operating Officer, Malavika Hegde, Director, and R Ram Mohan, Chief Financial Officer.
"Coffee Day Group is very confident of the future ahead in spite of the recent slowdown in consumption story. We will continue to strengthen the much-loved Coffee Day brand, build on our relationships with the millennials by offering newer, more relevant and a wider choice of products. To continue our expansion of business, your Board of Directors as recommended by the executive committee are exploring options of having suitable business/ financial partners for rapid and aggressive growth of the business and fully tap market opportunities," the interim chairman said.
Ranganath said the company was progressing in reducing debt by monetising non-core-assets and sale of some group companies. He added that the Group is also awaiting the investigation report by Ashok Kumar Malhotra, retired DIG of CBI, who was roped in to investigate the circumstances leading to the statement made in the letter of the former VG Siddhartha and to scrutinize the books of accounts of the company and its subsidiaries.
The café business has been performing well and it will continue to drive growth with new products, enhanced services, and relevant partnerships, the Group said in a press statement.
Coffee Day Group said that same-store sale growth (SSSG) increased from 7.23 percent in FY18 to 9.55 percent in FY19.
The group also mentioned the different business initiatives over recent years, including the launch of home delivery through a partnership with Uber Eats to launch virtual restaurant brands, Indus Plus, the company’s new-age IoT-enabled Android-based touch screen machine.
CCD had entered a new retail segment last year through a subsidiary, with a 51 percent stake, with Impact HD Inc. from Japan to set up a chain of convenience stores in India to expand its Fresh & Ground (F&G) business. About 425 retail outlets have been transferred to this subsidiary to be remodeled into a chain of retail stores that will go by the brand name Essentials.
"Work is currently underway to develop this brand into an around-the-clock, go-to store for food and beverages (F&B) and convenience products. I see this as the perfect opportunity for us to launch yet another national brand, starting out from the largely local outlets of F&G. The partnership also leverages our retail understanding of the Indian market with the global expertise of Impact HD Inc. in retail business," Ranganath said at the AGM.
Coffee Day Group's debt stood at Rs 4,970 crore in July. VG Siddartha had moved to sell his entire stake in Mindtree, a company he had first invested in 1999, and the transaction was concluded on May 3, 2019. The proceeds net of expenses and tax of Rs 2,100 crore have been utilized for the reduction of debt, the Group said. Coffee Day's subsidiary Tanglin Development also entered into an agreement with Blackstone Group and Salarpuria Sattva Group for offloading its Tech Park, Global Village in Bengaluru.
The transaction is at an enterprise value of Rs 2,700 crore. The closing of the transaction is subject to completion of precedent conditions including receipt of regulatory approvals, and a major part of the sale proceeds is planned to be utilized for bringing down the debt, the executives said.
The Group said the board of directors of Sical Logistics is also exploring various options of divestment of its assets including a portion of stake sale to strengthen its liquidity.
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