NCLT orders insolvency proceedings against Coffee Day Enterprises
NCLT has ordered initiating insolvency proceedings against Coffee Day Enterprises Ltd (CDEL), the parent company of Coffee Day Group which operates Cafe Coffee Day chain of coffee houses. The Bengaluru bench of the NCLT (National Company Law Tribunal) on August 8 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, which also owns and operates a resort, renders consultancy services and is engaged in the sale and purchase of coffee beans, had defaulted in the payment of coupon payments of redeemable non-convertible debentures (NCDs).
The financial creditor had subscribed 1,000 NCDs through private placement and paid Rs 100 crore towards the subscription in March 2019.
For that CDEL executed and entered into an agreement with IDBITSL agreeing to appoint as the debenture trustee for the debenture holders.
However, CDEL defaulted in paying the accrued aggregate coupon payments due on various dates between September 2019 and June 2020.
Consequently, the debenture trustee, on behalf of all the debenture holders, issued a notice of default on July 28, 2020 to CDEL and approached NCLT.
CDEL opposed the move claiming that IDBITSL is not authorised to initiate CIRP (Corporate insolvency resolution process) as the Debenture Trustee Agreement and Debenture Trust Deed do not grant powers to it to initiate CIRP.
It has not sought written instructions from
