Karnataka Bank set to recover over 50% of Coffee Day global debt
Karnataka Bank is set to recover more than half its dues this month-end from the debt sale of Coffee Day Global, said people aware of the development. The unlisted company operates the Cafe Coffee Day chain across India.
The bank has received a binding offer from Rare Asset Reconstruction Company (ARC), triggering a Swiss challenge auction.
The ARC has offered about ₹50-₹55 crore against dues of ₹88 crore, said one of the persons cited above.
In the past, Rare ARC had acquired Coffee Day Global debt of RBL Bank and Aditya Birla Capital.
Coffee Day Global is a subsidiary of listed Coffee Day Enterprises, promoted by the late VG Siddhartha, who committed suicide in 2019.
It has a debt of ₹982 crore as of FY23 against ₹960 crore a year ago, according to its annual report for FY23. The ₹982-crore debt includes inter-corporate loans of ₹146 crore from Tanglin Developments, the report showed.
The lender and Rare ARC didn't comment.
Karnataka Bank has invited expressions of interest by October 26, the data room will be open for only one day on October 26 and the e-auction is scheduled on October 27, the auction notice said.
Mid-August rare ARC acquired ₹110 crore Coffee Day Global loans at ₹68 crore upfront cash payment.
In September, IndusInd Bank sold its loans given to the same company to ASREC (India), an ARC. The National Company Law Tribunal had earlier admitted Coffee Day Global for insolvency on IndusInd Bank's petition.
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