Gaffe Coffee Day is now tasting the bitterness

9 April 2021
After Coffee Day Enterprises (CDEL) announced a default in loan payments in the March quarter, Indian lenders are considering moving the company to NCLT to settle the debt. If the process happens, the company can be declared insolvent.

As per the information given to the stock exchange in the quarter of March 2021, a total of Rs. There is an outstanding debt of Rs 280 crore. The company cites lack of cash due to delays in the repayment of loans. The company has a total debt of Rs 518 crore. The lenders have redeemed the mortgage shares of the company’s subsidiaries to recover their dues.

According to sources, the company was planning to sell its front-end vending machines and assets to Tata but has come to a standstill. Negotiations have been postponed by the current management due to demand for higher prices.

Sources close to the deal said that there is a difference of Rs 1,000 crore in valuations. If the company moves to NCLT, it would mean that the valuation for equity shareholders would be zero and the lenders would suffer huge losses. Trading in the company’s shares has already been banned.