The Chennai bench of the National Company Law Appellate Tribunal on Wednesday stayed the corporate insolvency resolution proceedings against Coffee Day Enterprises.
The interim order was granted following an appeal filed by Malvika Hegde, a shareholder and director of Coffee Day Enterprises, challenging the 8 August order by the National Company Law Tribunal (NCLT), which had permitted the initiation of the insolvency proceeding against the company by IDBI Trusteeship.
A detailed order is awaited in the matter.
Coffee Day Enterprises is the parent company of the Coffee Day group that operates Cafe Coffee Day chain.
In September 2023, IDBI Trusteeship had moved the Bengaluru bench of the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against Coffee Day Enterprises Ltd for an alleged default of ₹228 crore.
On 9 August, the company informed the exchanges in a filing that it was deliberating legal action in the matter.
Private lender IndusInd Bank too, in September 2023, had filed an insolvency application against the retail coffee outlet.
However, the bank later told the NCLT it had reached an amicable settlement with the firm and withdrew the insolvency application against the company. It submitted that the debt in question was sold to ASREC (India) Ltd, an asset reconstruction company. A joint settlement application was also 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 an insolvency resolution against Coffee Day Global Ltd. At that time, Shailendra Ajmera had been appointed as the company’s interim resolution professional to oversee its day-to-day affairs.
Shares of Coffee Day Enterprises were trading at ₹36.75 on the National Stock Exchange on Wednesday, up 5% from the previous close.
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