India’s largest café chain is facing legal action from investors after reportedly defaulting on loans during the March quarter
A Café Coffee Day store in Bengaluru, India | Photo credit: ALensAndSomeLuck via Shutterstock
Café Coffee Day owner, Coffee Day Enterprises Limited (CDEL), is reportedly facing legal action from lenders after it announced it had defaulted on loans during March 2021.
According to India’s Business Standard
news outlet, CDEL could face bankruptcy if lenders follow through with action to send the company to the National Company Law Tribunal (NCLT) for debt resolution.
According to the report, CDEL's outstanding debt amounts to Rs 2.8bn ($37.2m), with the company facing total debts of Rs 5.2bn $69m crore.
Founded in 1996, Café Coffee day has grown into India’s largest coffee chain, operating more than 1,700 outlets across some 243 cities in the country. It also has outlets in Malaysia, Nepal and Egypt.
In June 2019, the company was rocked by the suspected suicide of its founder V.G. Siddhartha. A subsequent investigation found Siddhartha had routed 27bn rupees ($360m) out of the company through transactions revealed in a note found after his death.
In late 2020 Café Coffee Day was reported to be in talks to sell its beverage vending machine business to Indian conglomerate Tata Group. However, the negotiations stalled after the coffee chain’s lenders, including Yes Bank and Rabobank, objected to the terms of the sale on the basis of outstanding loan repayments.