The world’s second-largest manufacturer and distributor of tea and a major producer of coffee ‘Tata Consumer Products Limited’ and a subsidiary of the Tata Group’s has offer or bid to buy the beverage vending machine company of the Coffee Day’s Group, the two individual’s familiar with first-hand knowledge of the issue has stated that the company has hit an obstacle with two lenders to the struggling coffee chain blocking the agreement until their dues are paid or cleared.
The biggest-selling tea brand in India ‘Tata Consumer Products Limited market tea’ which possesses the Tata Salt brands and Tetley Tea, has offered or proposed to obtain the coffee vending business from Café Coffee Day Global Limited (CDGL) for at least Rs.1,000 crore.
Meanwhile, the moneylenders to the CDGL (Coffee Day Global Limited), YES Bank, and Rabobank have demanded the reimbursement of Tata Consumer Products Limited
their entire dues or subscriptions for granting a no-objection certificate (NOC) to the proposed agreement, the individuals stated on condition of anonymity.
Besides, the Karnataka Bank is the largest Indian lender to Café Coffee Day Global Limited, with a loan of Rs.175 crore whereas the contributions to be refunded by CDGL are worth approximately Rs.100 crore to YES Bank and Rs.200 crores to Rabobank.
Furthermore, the proposal submitted to Coffee Day Global Limited lenders provides an equal amount of repayment, regardless of the size of the loan, along with each of the 14 lenders from the proceeds of the investment put forwarded by the Tata Consumer.
Moreover, the Tata Group has first agreed to pump in Rs.600 crore into the Café Coffee Day Global Limited (CDGL), and then pay Rs.400 crore or more after some months.
However, after the death of its founder V G Siddhartha last year, India’s largest coffee chain owner has been trying to sell assets to repay its lenders.
Lastly, Tata Group also operates the Starbucks café chain in India and if a company like Tata Group buys out the business, then the chances of revival are much higher, which will ultimately help the lenders to recover loans.