IndusInd Bank settles default dispute with Coffee Day Global

livemint.com:

IndusInd Bank on Wednesday informed the National Company Law Appellate Tribunal (NCLAT) that it has reached a settlement with Coffee Day Global and has withdrawn the insolvency petition against the company. A lawyer who is part of the deal said on the condition of anonymity that the debt in question was sold to ASREC (India) Ltd, an asset reconstruction company. A joint settlement application has also been filed by the two in the matter.

Following this, the Chennai bench of the appeals tribunal set aside a National Company Law Tribunal (NCLT) order from 20 July, which had allowed the initiation of insolvency resolution against Coffee Day Global Ltd. “Coffee Day has settled the entire debt to IndusInd by way of assignment of debt to ARSEC ARC. A joint settlement memo (was) filed, and (an) order has been passed by (the) NCLAT today," said a senior counsel from Skanda Legal, the firm representing IndusInd Bank in this case.

The company’s stock hit the upper circuit of 20% on Wednesday. IndusInd Bank, one of the financial creditors, had approached the NCLT against Coffee Day Global over a default of ₹94 crore. In its 20 July order, NCLT admitted IndusInd’s plea and ordered insolvency against the company.

Shailendra Ajmera was appointed as the interim resolution professional to oversee the day-to-day affairs of the company. Aggrieved by the order, the company approached the appeals forum, which stayed the proceedings and issued a notice to IndusInd Bank. Meanwhile, on Friday, IDBI Trusteeship moved the Bengaluru bench of NCLT to initiate insolvency proceedings against Coffee Day Enterprises for an alleged default of ₹228 crore.