Coffee Day Enterprises Ltd (CDEL) has struck a settlement deal to clear Rs 205 crore (equivalent to $23.9 million) of outstanding debt related to its Café Coffee Day (CCD) coffee chain.
Established in Bengaluru in 1996, CCD had expanded to over 1,750 outlets across 243 Indian cities by 2019. However, a combination of mounting debt and the tragic apparent suicide of its founder, V.G. Siddhartha, led to the closure of hundreds of stores.
As per a regulatory filing, CDEL will pay off the sums owed to two debenture holders in three installments. The first installment of Rs 55 crore ($6.4 million) will come from the sale of 12.41% of CCD shares to an undisclosed third party. A second payment of Rs 75 crore ($8.7 million) is due in 12 months. The third installment is contingent upon CDEL meeting specific financial benchmarks tied to higher EBITDA and share price. Following the announcement of the debt settlement agreement, the group’s shares surged by 5% within 24 hours.
CDEL stated, “This settlement upholds the company and its subsidiaries’ debt – reduction commitment for the benefit of all stakeholders. The company remains dedicated to fulfilling its obligations and creating long – term value for stakeholders.”
CDEL has been reducing its debts through asset resolutions and has significantly downsized its operations to control costs. During the first nine months of the fiscal year ending on 31 December 2024, the group closed 11 net outlets. Currently, it operates 439 stores, making it the third – largest branded coffee chain in India, trailing Tata Starbucks and Barista.
Net revenues for the nine – month period increased by 7% year – on – year to Rs 775 crore ($90.3 million). Third – quarter revenues were 9% higher year – on – year, reaching Rs 268 crore ($31.2 million), marking the third consecutive quarter of revenue growth. Nevertheless, the third – quarter EBITDA dropped by 62% to Rs 39 crore ($4.5 million), and CDEL reported a net loss of Rs 11 crore ($1.3 million) for the period, compared to a profit of Rs 61 crore ($7.1 million) in the same quarter of the previous year.
Related Topics：
- Melbourne Coffee Festival at MICE Aims to Elevate Enthusiasts’ Skills
- From Qatar to the Skies: Le Petit Camion Elevates Airport Dining
- Elevate Your Talent Game: Exclusive GCI Conference in London