a million tries Despite this, the effort to save Coffee Day was not successful. Finally, NCLT has been given approval to start bankruptcy proceedings. Let us tell you that the Corporate Disputes Tribunal NCLT has ordered to start bankruptcy proceedings against Coffee Day Enterprises Limited (CDEL), the parent company of Coffee Day Group. Coffee Day Group operates the Cafe Coffee Day chain of coffee houses. The Bengaluru bench of the National Company Law Tribunal (NCLT) accepted the petition filed by IDBI Trusteeship Services Limited (IDBI TSL) on 8 August. The petition claimed a default of Rs 228.45 crore and appointed an interim resolution professional to look after the operations of the debt-ridden company. Now the big question is what will happen to the investors who invested in the shares of this company? The stock closed at Rs 47 on Friday after hitting a lower circuit. Market experts say that it would be too early to say anything right now.
The company defaulted in paying the loan
CDEL owns and operates a resort and is in the business of coffee beans along with providing consultancy services. CDEL had defaulted in coupon payment of redeemable non-convertible debentures (NCDs). The financial lender 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. However, CDEL defaulted in paying the total coupon payments due on various dates between September, 2019 and June, 2020. As a result, the debenture trustee issued a notice of default to CDEL on July 28, 2020 on behalf of all debenture holders and approached the NCLT.
The owner had given up his life by jumping into the river
Let us tell you that Cafe Coffee Day, which many people call as CCD, was founded by VG Siddhartha in 1996. VG Siddhartha, who worked in the stock exchange, first bought a coffee plantation. After earning a lot in the stock market, he started a company named Coffee Day Global Limited. On 11 July 1996, the first outlet of Cafe Coffee Day was first started in Bangalore. The company started running but by the year 2017, the situation worsened. A notice of tax evasion of Rs 700 crore was received from the Income Tax Department. On one hand, heavy debt and on the other hand, the pressure of the Income Tax Department, the company owner VG Siddhartha could not bear the pressure. Due to the stress of debt, he committed suicide by jumping into the Netravadi river in 2019.
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