Coffee Day Global Ltd (CDGL) and its financial creditor IndusInd Bank have reached a settlement, following which NCLAT has set aside an insolvency order against the company which owns and operates coffee chain Cafe Coffee Day.
Counsel representing CDGL and IndusInd bank on Wednesday informed the Chennai bench of National Company Law Appellate Tribunal (NCLAT) about the settlement and sought permission to withdraw 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 to insolvency.
On August 11, NCLAT through an interim order had stayed the operations of the order of National Company Law Tribunal (NCLT) that directed the initiation of insolvency proceedings against CDGL.
This NCLT order was challenged by Malavika Hegde, Director of CDGL and the wife of late VG Siddhartha before the appellate tribunal.
On July 20, the Bengaluru bench of NCLT passed an order over a plea filed by IndusInd Bank, a financial creditor of the company, claiming dues of Rs 94 crore.
NCLT had also appointed Shailendra Ajmera as the interim resolution professional after suspending the board.
CDGL had requested a short-term loan of Rs 115 crore in February 2019.
As per the annual report of its parent firm Coffee Day Enterprises Ltd (CDEL) for FY23, CDGL owns 469 cafes in 154 cities and 268 CCD Value Express kiosks. It operated 48,788 vending machines that dispense coffee in corporate workplaces 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 and has significantly reduced it from the time the trouble started.