Allcargo, TVS Supply Chain Solutions in race for Sical Logistics' assets

MUMBAI: Allcargo and TVS Supply Chain Solutions (formerly TVS Logistics) are in initial discussions to acquire the supply chain business of Sical Logistics, the offshore and multimodal logistics services firm owned by the Coffee Day Group, two people aware of the development told ET.

Container freight hubs of Sical’s subsidiary, Sical Multimodal and Rail Transport, are also up for sale as the coffee chain seeks to sell a range of assets and use the proceeds to repay debt after the unfortunate death of group founder VG Siddhartha. Allcargo and TVS Logistics are also in discussions for the railroad assets, and both deals together could fetch the Coffee Day Group Rs 500-550 crore.

The supply chain solutions division of Sical includes cold chains, warehousing and industry distribution logistics. The division has a fleet of 414 vehicles and warehouse space of 1.2 million square feet.


“Bankers and advisers helping the Coffee Day owners have reached out to TVS Logistics and Allcargo Logistics to sell the logistics operations, and talks are at preliminary stages,” a banking source told ET. The Coffee Day Group currently holds 55.18% in Sical through its group entities.

ICICI Securities is advising Sical, said one of the persons cited above. Executives at Sical, Allcargo, TVS Supply Chain Solutions and investment banks declined to comment.

Coffee Day Enterprises has total debt of Rs 4,970 crore, according to its regulatory filing on August 17. The group is negotiating to sell Sical in parts, and strategic investors such as DP World have been approached for its port assets, ET had reported earlier. The group sold Global Village Tech Park, a 90-acre, IT focused tech park, to the Blackstone Group for around Rs 2,700 crore earlier this month.

The group’s major lenders include Standard Chartered Bank, IDBI Bank, Yes Bank and private equity funds such as KKR, New Silk Route, Affirma Capital, which manages portfolio of Standard Chartered Private Equity, SSG Asia and some high profile individual investors based in Bengaluru and Mumbai.

Sical Multimodal and Rail Transport (SMART), with pan-India container train operations, is a subsidiary entirely owned by the promoters. Under the Container Freight Station (CFS) division, there are facilities at Chennai, Vizag and Tuticorin and Inland Container Depots (ICD) at Melpakkam.

Multiple rakes carry both outbound and inbound goods across arterial corridors. The rail division has seven rakes, and either uses its own or hired containers to ship containerised cargo. The performance of the rail division is under stress due to higher haulage charges payable to Indian Railways, and competition from other container train operators and road transporters, as per the company’s FY19 annual report.