Blackstone to acquire Coffee Day’s tech park


BENGALURU: Blackstone, along with southern developer Salarpuria Sattva, has closed the deal to acquire Coffee Day Enterprises’ real estate venture Tanglin Developments, which owns a technology park in Bengaluru, for Rs 3,000 crores, said one source briefed on the development. The deal is the first major divestiture to help reduce the Rs 6,547 crores debt of the company after the suicide of founder VG Siddhartha last month. 

The deal is expected to be announced as soon as today and the payment by Blackstone will be done in multiple tranches. The first tranche of Rs 2,000-2,200 crores will be paid in four weeks of the deal closing while the remaining money will come in the next 24 months, said the source mentioned above. 

The source has also confirmed that the deal is being done through a special purpose vehicle where Blackstone will own about 90% and the remaining 10% will be held by Salarpuria. 

Coffee Day and Blackstone spokespersons could not be immediately contacted for a comment. 

It had been reported in March that Blackstone-Salarpuria is in talks to buy the technology park for Rs 2,800 crores. The talks were put on hold by VG Siddhartha as he started focusing on the sale of flagship coffee retail chain business to Coca-Cola and ITC, but was revived last month. 

Interestingly, Blackstone has agreed to pay a higher price than it was negotiating for earlier, said the source involved in the transaction. 

The money will be used to repay debt, including that held under Tanglin, which is a subsidiary of listed Coffee Day Enterprises. 

The tech park, Global Village, is a 4-million-sqft (square feet) tenanted office space located on a 120-acre campus with clients like Mphasis, Accenture and Mindtree. Global Village has a potential to add another 5-6 million-sqft as now using only 45 acres of the land parcel. It fetches average rentals of Rs 40-50 per sqft, lower than the bustling office corridor of the Outer Ring Road (ORR) due to its location.

Source: ET Realty