Loan payment

Coffee Day Enterprises Makes Loan Default Disclosures


oi-Roshni Agarwal


In a dossier filed with the ESB, Coffee Day Enterprises said there had been a delay in servicing the debt due to liquidity constraints and, in an appendix, provided the summary of the default on payments. interest or principal repayment of bank loans and unlisted debt instruments and securities for the quarter ended March 31, 2021.

Coffee Day Enterprises Makes Loan Default Disclosures

And as a result, the company’s creditors are planning to sue the coffee chain operator before the NCLT for the resolution of its loan. According to the record, CDEL’s outstanding debt as of the date was Rs. 280 crore, while its total indebtedness stands at Rs. 518 crore. Previously, the lenders had relied on the shares pledged by the subsidiaries of the company to recover their amount owed.

A source from the lending institution said the company was considering selling its front-end vending machine and store assets to the Tata Group. However, the operation was not successful due to the high valuations requested by the management of the company.

Now, once the company goes into bankruptcy it would result in zero valuations for the company’s shareholders as well as a massive haircut for lenders. The company’s equity is already suspended from trading.

In July 2019, the owner of the company, VG Siddhartha, committed suicide as the company faced an unprecedented liquidity problem. It was found in an investigation in which it was found that the developer owed the company Rs. 3,535 crore as of July 31, 2019.

The group reduced its stake in Mindtree for a financial contribution of Rs. 1975 crore and partially refunded its contributions. The group’s total debt stood at around Rs. 3,100 crore as of September 2020 and it is now considering selling its coffee plantations in Karnataka state to repay lenders.

Last year, the group sold its Bengaluru-based IT park to Blackstone for a financial consideration of Rs. 2,700 crore and wiped out contributions from 13 lenders.

For the quarter ended December 2020, the company’s revenue was Rs 4.14 crore and the loss was Rs 65.69 crore on a stand-alone basis.

Article first published: Thursday, April 8, 2021, 11:31 a.m. [IST]

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