‘However, prices offered were too low’

Mounting liquidity crisis forced coffee entrepreneur V.G. Siddhartha to reach out to at least three companies — including two builders and a foreign realty advisory firm — to sell some of his personal real estate assets in Bengaluru and Mysuru.

“Soon after the sale of his Mindtree shares, he started exploring liquidity for some of his realty assets. However, he was very upset with the prices he was offered by them. The offer prices were too low as the potential buyers were well aware that he was on a distress sale mode,’’ said a person who was close to Mr. Siddhartha.

Mr. Siddhartha was sitting on a time bomb in the last few years, said a planter who was also a friend of the entrepreneur.

“Most of his personal shares, shares of his wife Malavika and stake in some of his companies, including Coffee Day Enterprises Day were pledged. Debt was mounting on a daily basis with interest rising continuously,’’ said the planter.

Many say he had a personal debt of at least ₹1,000 crore. As per documents from Corporate Affairs Ministry, he raised funds through Coffee Day Consolidations, Devadarshini Info Technologies and Gonibedu Coffee.

“It is true that his family and his company own thousands of hectares of coffee plantations. But plantations, as such, have no value now-a-days with falling coffee prices. The land prices have also been too low in the last many years. Also, you don’t find any buyers for them unless you want to sell them dirt cheap,’’ said a professional attached to a global realty advisory firm. One acre plantation is available from ₹6 lakh to ₹25 lakh depending on various factors, market sources said.

As per media reports, some of Mr. Siddhartha’s lenders had questioned his ability to repay while casting doubts on the value of his assets, including the plantations. Coffee Day Enterprises reported consolidated borrowings of ₹6,547.38 crore as on March 31, 2019.

The board of Coffee Day Enterprises is scheduled to meet again on August 8.