Coffee Day Enterprises Ltd reported a total default of Rs 433.91 crore on payments of interest and repayment of the principal amount on loans from banks, financial institutions, and unlisted debt securities such as NCDs and NCRPS for the quarter ended June 30, 2024.
In a regulatory update, Coffee Day Enterprises Ltd (CDEL) stated that it is managing its debts through asset resolution and attributed the delay in debt servicing to a liquidity crisis. The company noted that the default amount has remained unchanged because it has not been adding interest since 2021.
Due to default in repayment of interest and principal to the lenders, the lenders have sent ‘loan recall’ notices to the company and initiated legal disputes. As a result, the company has not recognized interest from April 2021. As of June 30, 2024, CDEL has reported a default of Rs 183.36 crore on the payment of the principal amount on loans or revolving facilities like cash credit from banks or financial institutions.
Additionally, it has also defaulted in payment of interest of Rs 5.78 crore. For unlisted debt securities such as NCDs (Non-Convertible Debentures) and NCRPS (Non-Convertible Redeemable Preference Shares), the outstanding amount of default is Rs 200 crore as of June 30, 2024, along with a default in payment of interest of Rs 44.77 crore on the same. Following the death of founder Chairman V G Siddhartha in July 2019, CDEL has been facing challenges and is working to resolve debts through the sale of assets.
In March 2020, CDEL announced repaying Rs 1,644 crore to 13 lenders after concluding a deal with Blackstone Group to sell its technology business park. The company is also pursuing legal action to recover over Rs 3,535 crore allegedly siphoned out of the company into Mysore Amalgamated Coffee Estates Limited (MACEL), a personal firm promoted by its late founder V G Siddhartha.
