A plea has been entered against Café Coffee Day’s operating company, Coffee Day Global Ltd (CDGL), with the National Company Law Tribunal (NCLT), for initiating Corporate Insolvency Resolution Process (CIRP).
NCLT’s Bengaluru bench has passed an order on a plea filed by a financial creditor of the company, claiming dues worth Rs 94 crore, Coffee Day Enterprises Ltd, CDGL’s parent company said in a regulatory filing.
“The application filed by one of the lenders against the material subsidiary CDGL before NCLT, Bengaluru, has been admitted (oral order) under Section 7 of Insolvency and Bankruptcy Code, 2016 for initiating CIRP for Rs 94 crore,” it said. It further added that it is waiting for a written order from the NCLT, as per a report by PTI.
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“Further, the material subsidiary has informed the company that, it will take the required legal action in this regard,” it said. CDGL reported a consolidated total income of Rs 920.41 crore with a loss of Rs 67.77 crore in 2022-23.
According to CDEL’s annual report for FY22, CDGL owns 495 cafes in 158 cities and 285 CCD Value Express kiosks, along with 38,810 vending machines that dispense coffee in corporate workplaces and hotels.
Ever since the death of founder Chairman V G Siddhartha in July 2019, Coffee Day Enterprises has been in trouble. It is paring its debts through asset resolutions and has significantly scaled it down from the time the trouble started. In March 2020, CDEL announced it is repaying Rs 1,644 crore to 13 lenders after it managed to finalise a deal with Blackstone Group to sell its technology business park.
Earlier this year, the company also attracted a penalty of Rs 26 crore from the market regulator SEBI, after it failed to stop the diversion of Rs 3,535 crore from it’s subsidiary Mysore Amalgamated Coffee Estates Ltd (MACEL), which is an entity related to promoters. It is trying to recover the amount legally from MACEL.
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