India's top coffee chain owed $472 mln by deceased founder's firm -probe report

SICAL Logistics

24/07/2020 14:25

BENGALURU, July 24 (Reuters) - An entity linked to the
deceased founder of India's Coffee Day Enterprises Ltd  CODE.NS 
owed the coffee chain 35.35 billion rupees ($472.5 million), an
investigation report released by the company showed on Friday.
    Coffee Day founder V.G. Siddhartha was found dead in a river
in southern India last July in an apparent suicide amid
speculation that he was under intense financial strain.
 urn:newsml:reuters.com:*:nL4N24W0SO
    The Bengaluru-headquartered company had then appointed an
investigator to scrutinize its accounts and the circumstances
leading to the statements made in a letter purportedly written
by Siddhartha.
    Mysore Amalgamated Coffee Estates Ltd, an entity linked
separately to Siddhartha and involved in a business relationship
with Coffee Day, owed Coffee Day $472 million as of July 31,
2019 - the day Siddhartha's deceased body was found by
authorities - the synopsis of the investigation report released
by Coffee Day to stock exchanges showed https://www.bseindia.com/xml-data/corpfiling/AttachLive/01990559-a064-496d-acea-a0cd04a20789.pdf
 on Friday.
    About $360 million of that amount still needed to be
addressed, the report said.
    A significant portion of the amount may have been spent to
buy back shares from private equity investors, repay loans and
funding investments outside the scope of the investigation, the
report said. As a result, the amounts may not be precise, it
added.
    Coffee Day, which also exports coffee, sells coffee-vending
machines and houses a logistics business called Sical  SICA.NS ,
currently had a debt of 32 billion rupees ($427.7 million), it
said.
    It is India's largest coffee chain with more than 1,000
cafes that brew cappuccinos and lattes for India's booming
moneyed class, and competes with the likes of Starbucks Corp
 SBUX.O , Barista and Coca-Cola Co-owned  KO.N  Costa Coffee.
    The company, whose revenue has taken a hit in the wake of
the COVID-19 pandemic, is in the process of selling off more
assets to raise cash and cut debt, it added.

($1 = 74.8084 Indian rupees)

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ANALYSIS-Coffee baron's death fuels India Inc anger over govt
crackdown on wrongdoing     urn:newsml:reuters.com:*:nL4N24X4E3
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 (Reporting by Sachin Ravikumar; Editing by Saumyadeb
Chakrabarty)
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