Clix Cos sell Rs 107 cr principal dues of Coffee Day Enterprises unit to Phoenix ARC

Apollo Global Management-backed Clix Capital and Clix Finance have sold their exposure in a Coffee Day Enterprises entity to Phoenix ARC Pvt Ltd at a discount of 19%, said two people with knowledge of the matter.
The two finance companies jointly sold Rs 107 crore principal loans in Coffee Day Hotels & Resorts for a consideration of Rs 87 crore, the people said. The deal equates to a recovery of 81% for Clix Capital and Clix Finance.

Coffee Day Hotels and Resorts is a 100% subsidiary of listed Coffee Day Enterprises, with liabilities of Rs 330 crore, according to the annual report of Coffee Day Enterprises for the financial year ended March 31, 2021. The liabilities include bank creditors and trade creditors dues.

Clix Capital sold principal dues of Rs 11 crore, while Clix Finance sold Rs 96 crore. Both loans were backed by share pledges of Coffee Day Enterprises and its step-down subsidiary, Coffee Day Global.

Coffee Day Hotels & Resorts operates luxury resorts in the name of ‘The Serai’ at Chikmagalur in Karnataka and other resorts in Bandipur, Kabini and Andaman.

Clix and Phoenix ARC did not respond to requests for comment.

The Coffee Day group is divided into the coffee business, real estate, logistics and hospitality.

An out-of-court debt resolution process of the coffee business which comes under Coffee Day Global and includes cafes and vending machines was delayed due to the impact of Covid-19. The company provided Rs 80 crore as depreciation in FY20-21 because several vending machines were withdrawn from customer locations and some of which were customised could not be removed and they did not have any salvage value, Coffee Day Enterprises had stated in its balance sheet.

By March 31, 2021, the Coffee Day cafes were reduced to 572 from 1,192 a year earlier, while the number of CCD kiosks fell to 333 from 412 and functional vending machines to 36,326 from 58,697.

The Tata group, which conducted due diligence to acquire the vending machine business, is no longer pursuing the deal, according to media reports. The deal did not conclude due to differences over valuation, a third person with knowledge said.

A portion of the group’s real estate business, which comes under Tanglin Development Ltd (TDL), was sold to Blackrock.

The US-based private equity company acquired TDL’s subsidiary Global Village Tech Park — a special economic zone — by agreeing to make payment in two tranches: Rs 2,000 crore was paid in 2020 while the remaining Rs 700 crore is due in December this year, said the third person.

The logistic business which comes under Sical Logistics is undergoing a corporate insolvency and resolution process.