Bangalore based, Coffee Day Enterprises said it has ₹518 crore of debt, comprising of both short and long term. It further goes on to state that it has defaulted on about ₹263 crore of payments. In a disclosure to stock exchanges, the Bengaluru-based company that runs a chain of Café Coffee Day outlets, said it owed ₹280 crore, availed of as cash credits from banks or financial institutions, and another ₹200 crore in unlisted debt services. It also owes interest on the defaulted loans.
The Lenders’ View
It is believed that Café Coffee Day owes money to four lenders, including Axis Bank, SSG Singapore, and Aditya Birla Finance. These debts are not new, and have remained on the company’s books since the demise of founder VG Siddartha. It is good to note that none of the lenders have moved the National Company Law Tribunal (NCLT) for the recovery of debts.
Blackstone Group which has bought out Global Technology Village in Bangalore for ₹2,700 crores. It is expected to shortly make its second tranche payment of ₹700 crore to Coffee Day.
The Blackstone Group has already paid out ₹2000 crores last March. Coffee Day is expecting the balance payments within the next two months.
On receipt of ₹700 crore from Blackstone, the company will first clear the debt of Tanglin Development, which had owned Global Technology Village. The balance will be used to pay the four lenders proportionately.
What does the future hold?
Shares of Coffee Day were trading on the NSE at ₹26.05. The threat of bankruptcy is very real for the company right now. It may not be long before the lenders move the NCLT for recovery of debts. There are also rumours that the company may be forced to delist from the bourses.
It seems to be a string of bad news for the company which was the pioneer in shaping the café landscape in India.