Coffee Day Stares At Insolvency Over Alleged Default

Coffee Day Enterprises Ltd., which controls the Cafe Coffee Day brand, is staring at insolvency over alleged default of 228.46 crore rupees ($28 million).

IDBI Trusteeship Services Ltd. has filed an application against the company before the National Company Law Tribunal (NCLT) for the alleged default, Coffee Day Enterprises said in a stock exchange announcement.

IDBI Trusteeship filed the insolvency petition against the company before the Bengaluru bench of the NCLT under Section 7 of the Insolvency and Bankruptcy Code.

Coffee Day Enterprises said it is seeking legal advice and will take all appropriate steps to protect its interest in the matter.

In July, the company’s subsidiary Coffee Day Global Ltd. had slipped into the insolvency following a petition by its financial creditor IndusInd Bank Ltd.

However, the National Company Law Appellate Tribunal (NCLAT) later stayed the NCLT’s insolvency order against Coffee Day Global following an appeal by the company.

The first Cafe Coffee Day outlet, popularly known as CCD, was opened in 1996 in the southern Indian city of Bengaluru. The outlet has now presence across more than 200 cities in the country.

Note: $1 = 83.042 Indian rupees

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