Coffee Day Global, the operator of Cafe Coffee Day chains, was admitted for corporate insolvency by the Bengaluru bench of the National Company Law Tribunal (NCLT) last week, The Economic Times (ET) reported on Monday. Based on a petition filed by IndusInd Bank, the NCLT passed an oral order on Thursday to admit the unlisted company. The tribunal is yet to upload a detailed order.
Coffee Day Global, a subsidiary of listed Coffee Day Enterprises, was promoted by the late VG Siddhartha. According to the annual report, as on March 31, 2022, the firm has an outstanding debt of Rs 67.3 crore from IndusInd Bank.
A source was quoted as saying by ET that the tribunal admitted the firm after negotiations on a one-time settlement between IndusInd Bank and the company collapsed. According to the NCLT website, Coffee Day Global had appointed Tatva Legal while IndusInd had appointed Skanda Legal as their respective counsels.
Coffee Day Global’s annual report shows that the firm owns 495 Cafe Coffee Day outlets in 158 cities and 285 CCD Value Express kiosks. 38,810 Coffee vending machines in corporate workplaces and hotels have also been installed by the firm.
As of March 2022, the firm has Rs 960 crore debt, which includes bank loans and inter-corporate deposits of Rs 119 crore to Tanglin Development, a group entity.
The Securities and Exchange Board of India, in January 2023, imposed a fine of Rs 26 crore on the company. The penalty was imposed for diverting funds from subsidiaries to a firm related to the promoters. According to the market regulator’s order, Rs 3,535 crore from 7 subsidiaries of Coffee Day Enterprises was diverted to Mysore Amalgamated Coffee Estates Ltd, an entity also related to the promoters of CDEL.
First Published: Jul 24 2023 | 1:14 PM IST
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