The Bengaluru bench of NCLT passed the order on a petition filed by the company’s financial creditor demanding Rs 94 crore dues. Shares of Coffee Day Enterprises Ltd fell by Rs 7.65, or 19.26 per cent, to end at Rs 32.06 on the BSE.
Coffee Day Global Limited (CDGL), which owns and operates the popular coffee chain Cafe Coffee Day chain, on Monday, July 24, announced that the Bengaluru bench of the National Company Law Tribunal (NCLT) has admitted the company to corporate insolvency.
CDGL’s parent company Coffee Day Enterprises Ltd said in a regulatory filing that the NCLT order was passed on a petition filed by the company’s financial creditor claiming dues of Rs 94 crore.
“An application filed by one of the lenders before NCLT, Bangalore against material subsidiary CDGL, accepted (oral order) under Section 7 of the Insolvency and Bankruptcy Code, 2016 to initiate CIRP for Rs 94 crore,” it said. However, CDGL is awaiting a written order from the NCLT, it added.
“Furthermore, the material subsidiary company has been informed that necessary legal action will be taken in this regard,” it said.
In 2022-23, CDGL consolidated Total revenue Rs.920.41 crore. A loss of Rs 67.77 crore was reported this year. As per CDEL’s annual report for FY22, CDGL has 495 cafes and 285 CCD Value Express kiosks across 158 cities. There are 38,810 vending machines under the brand that dispense coffee to corporate workplaces and hotels.
Coffee Day Enterprises It has been in trouble since the death of founder-chairman VG Siddhartha in July 2019. Debts are being resolved through asset resolutions, which have significantly reduced the problem since its inception.
In March 2020, CDEL announced repayment of Rs 1,644 crore to 13 lenders after terminating an agreement with Blackstone Group to sell its technology business park.
Earlier this year, capital markets regulator Sebi had also fined CDEL Rs 26 crore for failing to prevent the diversion of Rs 3,535 crore from the company’s subsidiary Mysore Amalgamated Coffee Estates Ltd (MACEL).
Shares of Coffee Day Enterprises Ltd fell by Rs 7.65, or 19.26 per cent, to end at Rs 32.06 on the BSE.
(Edited by: Shoma Bhattachari)
First Published: July 24, 2023 8:45 PM IST