Coffee Day Global Ltd (CDGL) and its financial creditor IndusInd Bank have reached a settlement, following which NCLAT has set aside an insolvency order against the company which owns and operates coffee chain Cafe Coffee Day.
On Wednesday, attorneys for CDGL and IndusInd bank informed the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) of the settlement and requested authorization to end the insolvency proceedings. In order to set aside the order admitting CDGL to insolvency, a two-member bench made up of Justices M. Venugopal and Shreesha Merla took their arguments into consideration.
The National Company Law Tribunal (NCLT) order that directed the initiation of insolvency proceedings against CDGL was stayed in effect by an interim order issued by NCLAT on August 11. Malavika Hegde, Director of CDGL and widow of the late VG Siddhartha, appealed this NCLT order to the appellate tribunal.
On July 20, the NCLT’s Bengaluru bench issued a ruling regarding a petition brought by IndusInd Bank, a creditor of the business who sought payment of Rs 94 crore in back debt. After suspending the board, NCLT also named Shailendra Ajmera as the interim resolution specialist. In February 2019, CDGL submitted a short-term loan request for Rs 115 crore.
As per the annual report of its parent firm Coffee Day Enterprises Ltd (CDEL) for FY23, CDGL owns 469 cafes in 154 cities and 268 CCD Value Express kiosks. It operated 48,788 vending machines that dispense coffee in corporate workplaces and hotels under the brand.
In 2022-23, CDGL’s consolidated net operational revenue was Rs 869 crore and had reported a loss of Rs 67.77 crore. CDEL is in trouble since the death of founder Chairman V G Siddhartha in July 2019. It is paring its debt through asset resolutions and has significantly reduced it from the time the trouble started.
