NCLT gives nod to start insolvency proceedings against Coffee Day Enterprises
NCLT Bengaluru admits insolvency petition filed by IDBI Trusteeship Services against Coffee Day Enterprises, the parent company of the Coffee Day Group which owns and operates a resort, renders consultancy services and is also engaged in the sale and purchase of coffee beans.
Coffee Day Enterprises had defaulted on a payment of Rs 228 crore.
The company had issued an aggregate of 2000 unlisted, unrated, secured, redeemable non-convertible debenture (“NCDs) of nominal value of Rs 10,00,000 each, aggregating to Rs 200 crore not more than two tranches, through private placements. The financial creditor — IDBI Trusteeship Services – had subscribed 1,000 NCDs at the price of Rs 100 crore.
In lieu of the subscription money raised, the Corporate Debtor covenanted to pay the Financial Creditor certain amounts in accordance with the terms of the Debenture Trust Deed.
The Corporate Debtor then defaulted in paying the accrued aggregate Coupon Payments for the respective Coupon Periods ending on the following Coupon Payment Dates 30 September 2019, 31 December 2019, 31 March 2020 and 30 June 2020.
Consequently, the Debenture Trustee, on behalf of all the Debenture holders, issued a notice of default and acceleration dated 28 July 2020 to Coffee Day Enterprises, the pledgers under the Pledge Agreement and VG Siddhartha (as personal guarantor under the Deed of Personal Guarantee).
Under the Notice of Default and Acceleration, the Debenture Trustee notified the Corporate Debtor about the occurrence of such default. In accordance with the Debenture Trust Deed, the Corporate Debtor is due and liable to pay the Debenture holders (including the Financial Creditor), Debt aggregating to an amount of Rs 249 crore as on that date.
Coffee Day Enterprises, through its subsidiaries, associates and joint venture companies, is engaged in conducting business in multiple sectors such as Coffee-retail and exports, leasing of commercial office space, financial services, integrated multimodal logistics, hospitality and informational technology/enables services. The company was founded by VG Siddhartha.
Also See: Coffee Day Enterprises defaults on payment of Rs 465 crore
