Cafe Coffee Day may be headed for bankruptcy after defaulting on loan payments

Coffee Day Enterprises Limited (CDEL), which owns the Cafe Coffee Day chain, may be headed for bankruptcy after defaulting on loans during the March quarter. CDEL's lenders are considering taking the company to the National Company Law Tribunal (NCLT) for debt resolution. The lenders have invoked the shares pledged by CDEL's subsidiaries to recover their dues.

The company said it has outstanding dues of Rs 280 crore in terms of cash credits from banks or financial institutions. It also owes Rs 200 crore in unlisted debt services, CDEL said in a BSE filing on April 6. CDEL said its total indebtedness was Rs 518 crore. The company has also defaulted on the interest due on the payments that it delayed.

CDEL was planning on selling its front-end vending machine and stores' assets to the Tata Group but the talks failed due to the high valuation sought by the management.

CDEL is awaiting Rs 700 crore in the second tranche of payment from the Blackstone Group from the sale of the Global Technology Village.

Blackstone in September 2019 agreed to buy Global Technology Village in Bengaluru for Rs 2,700 crore. The group has been battling a financial crisis after Cafe Coffee Day founder VG Siddhartha died by suicide in July 2019.