New Delhi, 25th July 2023: Coffee Day Global, the operator of Cafe Coffee Day franchises, was admitted for corporate insolvency by the National Company Law Tribunal (NCLT) Bengaluru bench last week. The news of the insolvency came out on Monday.
The Economic Times reported that, the NCLT issued an oral order on Thursday to admit the unlisted firm based on a petition submitted by IndusInd Bank. A detailed order has yet to be uploaded by the tribunal.
The late VG Siddhartha promoted Coffee Day Global, a subsidiary of listed Coffee Day Enterprises. According to the annual report, as of March 31, 2022, the company owed IndusInd Bank Rs 67.3 crore.
According to ET, the tribunal admitted the firm after negotiations on a one-time payment between IndusInd Bank and the company had failed. According to the NCLT website, Coffee Day Global retained Tatva Legal as counsel, while IndusInd retained Skanda Legal.
According to Coffee Day Global’s annual report, the company owns 495 Cafe Coffee Day locations in 158 cities as well as 285 CCD Value Express kiosks. The company has also installed 38,810 coffee vending machines at corporate offices and hotels.
The corporation had Rs 960 crore in debt as of March 2022, which included bank loans and inter-corporate deposits of Rs 119 crore to Tanglin Development, a group subsidiary.
The Securities and Exchange Board of India fined the business Rs 26 crore in January 2023. The fine was levied for transferring funds from subsidiaries to a company affiliated with the promoters.
According to the market regulator’s order, Rs 3,535 crore from Coffee Day Enterprises’ 7 subsidiaries was transferred to Mysore Amalgamated Coffee Estates Ltd, a firm also affiliated to CDEL’s owners.
