Coffee Day Global Ltd.
Credit: Reuters Photo
Coffee Day Global Ltd (CDGL) and its financial creditor IndusInd Bank reached a settlement, following which NCLAT has set aside an insolvency order against the company which owns and operates coffee chain Cafe Coffee Day.
The counsels representing CDGL and IndusInd Bank on Wednesday informed the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) about the settlement and sought permission to withdraw the insolvency litigations.
A two-member bench comprising Justice M Venugopal and Shreesha Merla took their submissions on record and set aside the order admitting CDGL for insolvency proceedings.
On August 11, NCLAT, through an interim order, stayed the operations of the order of the National Company Law Tribunal (NCLT) that directed the initiation of insolvency proceedings against CDGL on July 20, 2023.
IndusInd Bank had assigned its loan of CDGL to an ARC and filed a joint memo to set aside the NCLT order dated July 20. The memo was filed before NCLAT, Chennai, according to a regulatory filing on Wednesday.
The filing to the stock exchanges was made by the company's parent firm Coffee Day Enterprises Ltd (CDEL).
"NCLAT, Chennai on September 13, 2023 passed an order terminating CIRP proceedings against CDGL and set aside NCLT order," it said.
CIRP refers to Corporate Insolvency Resolution Process.
NCLT's order on July 20 was challenged by Malavika Hegde, Director of CDGL and the wife of late V G Siddhartha before the appellate tribunal.
The order was passed by the Bengaluru bench of NCLT on a plea filed by IndusInd Bank claiming dues of Rs 94 crore.
NCLT had also appointed Shailendra Ajmera as the interim resolution professional after suspending the board.
As per the annual report of CDEL for last financial year, CDGL owned 469 cafes in 154 cities and 268 CCD Value Express kiosks. It operated 48,788 vending machines that dispense coffee in corporate work places and hotels under the brand.
In 2022-23, CDGL's consolidated net operational revenue was Rs 869 crore and had reported a loss of Rs 67.77 crore.
CDEL is in trouble since the death of founder Chairman V G Siddhartha in July 2019. It is paring its debt through asset resolutions.