In a filing to the BSE, Coffee Day Enterprises has said that there has been a delay in servicing debt owing to liquidity constraints and in an annexure has provided the summary of default on payment of interest or repayment of principal amount on loans from banks and financial instruments and unlisted debt securities for the quarter ended March 31, 2021.
And therefore the company's creditors are considering to take the café chain operator to the NCLT for resolution of its loan. As per the filing, CDEL's outstanding debt as on date was at Rs. 280 crore, while its total indebtedness amounts to Rs. 518 crore. Earlier the lenders have invoked the shares pledged by the company's subsidiaries to get back their due amount.
A source from the lending institution provided that the company was considering sale of its front end vending machine as well as stores' assets to the Tata group. Nonetheless the deal didn't went through because of high valuations asked by the company's management.
Now after the company is brought for bankruptcy proceedings then it would translate to zero valuations for the company's shareholders as well as a massive haircut for lenders. The company's equity is already suspended from trading.
In July 2019, the company's owner VG Siddhartha committed suicide as the company saw unprecedented liquidity problem. There was found in a inquiry in which it was found that the promoter owed Rs. 3535 crore to the company as on July 31, 2019.
The group pared its holding in Mindtree for a financial consideration of Rs. 1975 crore and repaid partly its dues. The total group debt stood at around Rs. 3100 crore as on September 2020 and its now mulling to sell its coffee estates in the state of Karnataka to pay off the lenders.
Last year, the group sold its Bengaluru-based IT park to Blackstone for a financial consideration of Rs. 2700 crore and cleared the dues of 13 lenders.
For the quarter ended December 2020, the company's revenue stood at Rs 4.14 crore and loss at Rs 65.69 crore on a standalone basis.