Coffee Day Global Ltd (CDGL) on Wednesday reported that it had reached a resolution with its financial creditor, IndusInd Bank. Consequently, the National Company Law Appellate Tribunal (NCLAT) has nullified the insolvency order against the company, which is the proprietor and operator of the Cafe Coffee Day chain.
The legal representatives of the companies apprised the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) about the settlement and requested authorization to withdraw the insolvency lawsuits, as reported by PTI.
Read More: Coffee Day Enterprises to negotiate settlement amidst bankruptcy proceedings
A two-member bench, consisting of Justice M Venugopal and Shreesha Merla, acknowledged their submissions and subsequently annulled the order that had previously admitted CDGL to insolvency.
On August 11, NCLAT issued an interim order that temporarily halted the enforcement of the National Company Law Tribunal’s (NCLT) directive to initiate insolvency proceedings against CDGL.
Read More: NCLAT halts Coffee Day Enterprises’ insolvency admission amid promoter’s default date challenge
Malavika Hegde, who serves as the Director of CDGL and is the spouse of the late VG Siddhartha, contested this NCLT order before the appellate tribunal.
On July 20, the Bengaluru bench of NCLT issued a ruling in response to a petition submitted by IndusInd Bank, a financial creditor of the company, seeking recovery of INR 94 crore in outstanding dues.
Following the suspension of the board, the National Company Law Tribunal (NCLT) had also appointed Shailendra Ajmera as the interim resolution professional.
Read More: Coffee Day Global enters bankruptcy proceedings following NCLT’s decision
In February 2019, CDGL had applied for a brief-term loan of INR 115 crore.
According to the FY23 annual report of its parent company, Coffee Day Enterprises Ltd (CDEL), CDGL possesses 469 cafes spread across 154 cities, along with 268 CCD Value Express kiosks. Additionally, it manages 48,788 vending machines that serve coffee in corporate offices and hotels under its brand.
During the fiscal year 2022-23, CDGL achieved a consolidated net operational revenue of INR 869 crore but recorded a loss of INR 67.77 crore.
CDEL has faced challenges since the passing of its Founder Chairman, V G Siddhartha, in July 2019. The company has been diligently reducing its debt through asset resolutions and has made substantial progress in reducing it since the onset of its financial difficulties.
