Coffee Day Enterprises negotiating settlement with IDBI Trusteeship in parallel to NCLAT proceedings
The apex court had also directed that if the appeal filed by CDEL is not disposed of by NCLAT, then the order passed by the appellate tribunal staying the Corporate Insolvency Resolution Process (CIRP) shall stand vacated automatically
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New Delhi: Coffee Day Enterprises Ltd (CDEL), which owns the Cafe Coffee Day chain, is trying to negotiate a settlement with its creditor IDBI Trusteeship Services in parallel to the ongoing proceeding before insolvency appellate tribunal NCLAT. On August 14, 2024, the National Company Law Appellate Tribunal (NCLAT) stayed the insolvency proceedings initiated against CDEL by NCLT over the plea of DBI Trusteeship Services Ltd (IDBITSL). However, this was challenged by IDBITSL before the Supreme Court, which had on January 31, 2025, directed the Chennai bench of NCLAT to dispose of the pending appeal before February 21, 2025.
The apex court had also directed that if the appeal filed by CDEL is not disposed of by NCLAT, then the order passed by the appellate tribunal staying the Corporate Insolvency Resolution Process (CIRP) shall stand vacated automatically. Updating the status, CDEL in a regulatory filing on Sunday informed: "The arguments in NCLAT are ongoing and in parallel the parties are negotiating for settlement." The settlement proposal is subject to final approval of both the parties and necessary documentation, it added. "The company will take all the necessary steps in the best interest of the company," the filing said.
On August 8, the Bengaluru bench of the National Company Law Tribunal (NCLT) admitted the plea filed by IDBI Trusteeship Services Ltd (IDBITSL) claiming a default of Rs 228.45 crore and appointed an interim resolution professional to take care of the operation of the debt-ridden company. CDEL is the parent company of Coffee Day Group which operates the Cafe Coffee Day chain of coffee houses. It also owns and operates a resort, renders consultancy services and is engaged in the sale and purchase of coffee beans. Coffee Day Enterprises is in trouble after the death of founder Chairman V G Siddhartha in July 2019. It is paring its debts through asset resolutions and has significantly scaled down from the time the trouble started.
