CCD had issued NCD to raise money. The company has defaulted in paying interest on this. NCLT has given this order against this mistake.
New Delhi. Café Coffee Day (CCD), famous for its tasty coffee, is finally on the verge of being sold. The National Company Law Tribunal has accepted the petition filed against CCD and ordered the initiation of bankruptcy proceedings. NCLT has ordered the initiation of bankruptcy proceedings against Coffee Day Enterprises Limited (CDEL), the parent company of Coffee Day Group. The Coffee Day Group operates the Café Coffee Day chain of coffee houses.
On August 8, the Bengaluru bench of the National Company Law Tribunal (NCLT) admitted a petition filed by IDBI Trusteeship Services Limited (IDBI TSL) claiming default of Rs 228.45 crore and sought appointment of an interim resolution professional to look after the operations of the debt-ridden company.
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Many businesses other than coffee
CDEL owns and operates a resort and is in the business of coffee beans along with providing consultancy services. The company also runs several cafes across the country. The company also has cafe houses in Vienna, Czech Republic, Malaysia, Nepal and Egypt. Apart from coffee, it is also working in freight, financial services, leasing commercial space sector.
In which default is the company trapped?
CCD’s parent company CDEL had issued redeemable non-convertible debentures (NCDs) to raise money. There has been a default in its coupon payment. Financial lender IDBI Bank had subscribed to 1,000 NCDs through private placement and paid Rs 100 crore for the subscription in March 2019. For this, CDEL entered into an agreement with IDBI TSL and agreed to appoint it as debenture trustee for the debenture holders. CDEL defaulted in the total coupon payment due on various dates between September 2019 and June 2020. Therefore, the debenture trustee issued a notice of default to CDEL on July 28, 2020 on behalf of all debenture holders and approached the NCLT.
a profitable company
It is not that the company’s business has gone into loss right now. Even though the company has defaulted on payment of Rs 228 crore, its business is running in profit. The company earned a net profit of about Rs 24.57 crore in the last financial year. Earlier, the company was running in a loss of Rs 12 crore. Data till August 1, 2024 shows that the market cap of the company has reached Rs 1,078 crore.
Tags: black coffee, Business news, Loan default
FIRST PUBLISHED : August 10, 2024, 17:42 IST
