Coffee Day Global settles IndusInd dues; insolvency proceedings suspended

The corporate insolvency resolution process (CIRP) of Coffee Day Global Limited, a material subsidiary of Coffee Day Enterprises, has been closed after the former entered into a settlement with financial creditor IndusInd Bank.

Coffee Day Enterprises in an exchange filing said that the NCLAT, Chennai on 13 September 2023 passed an order terminating CIRP proceedings against Coffee Day Global Limited and set aside NCLT order of 20 July 2023.

The Insolvency petition against Coffee Day Global Limited was brought by IndusInd Bank after the former defaulted on a payment of Rs 94 crore. The NCLT admitted the insolvency application file by IndusInd Bank on 20 July 2023.

NCLT had appointed Shailendra Ajmera as the interim resolution professional and suspended the board of Coffee Day Global Ltd.

However, the company moved NCLAT which stayed the insolvency proceedings against it. The company had disputed the date of default. It was argued that the date of default’ in Form’ I’, Part’IV’ is specifically mentioned as 30 April 2020, and even in the rejoinder filed by the IndusInd Bank is mentioned that the date of default’ has been backdated from 30 June 2022 to April 30, 2022.

As per the annual report of its parent firm Coffee Day Enterprises Ltd 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.

Coffee Day Enterprises is also in trouble after it defaulted on a payment of Rs 465 crore which was due in the June 2023 quarter. Coffee Day Enterprises defaulted payment on two counts –repayment of loans from banks and repayment of NCDs.

It is to be noted that one of the stepdown subsidiaries of Coffee Day Enterprises — SICAL Logistics Limited (SLL) – underwent corporate insolvency resolution process. The approved resolution plan of SICAL Logistics, however, had NIL payment provisions to related parties of SICAL. Due to this Coffee Day Enterprises had to write off an amount of Rs 392 crore.

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