NCLT admits insolvency plea against Coffee Day Global

The Bengaluru bench of the NCLT passed an order over a plea filed by a financial creditor of the company, claiming dues of Rs 94 crore, Coffee Day Enterprises Ltd, CDGL's parent company said in a regulatory filing.

PTI

July 24, 2023 / 18:44 IST

Coffee Day Enterprises is in trouble after the death of founder Chairman V G Siddhartha in July 2019.

The National Company Law Tribunal has admitted a plea against Coffee Day Global Ltd (CDGL), which owns and operates popular chain Cafe Coffee Day, for initiating Corporate Insolvency Resolution Process (CIRP). The Bengaluru bench of the NCLT passed an order over a plea filed by a financial creditor of the company, claiming dues of 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. However, CDGL is waiting for the written order from the NCLT, it added.

"Further, the material subsidiary has informed the company that, it will take the required legal action in this regard," it said. In 2022-23, CDGL's consolidated total income was Rs 920.41 crore. It had reported a loss of Rs 67.77 crore in the year.

As per the annual report of CDEL for FY22, CDGL owns 495 cafes in 158 cities and 285 CCD Value Express kiosks. There are 38,810 vending machines that dispense coffee in corporate workplaces and hotels under the brand. Coffee Day Enterprises is in trouble after the death of founder Chairman V G Siddhartha in July 2019. 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 repaying Rs 1,644 crore to 13 lenders after concluding a deal with Blackstone Group to sell its technology business park. Earlier this year, capital markets regulator SEBI had also levied a penalty of Rs 26 crore on CDEL for failing to stop the diversion of Rs 3,535 crore from the company's subsidiary Mysore Amalgamated Coffee Estates Ltd (MACEL), which is an entity related to promoters.