Mumbai: In a significant move to de-leverage its balance sheet, Coffee Day Enterprises Limited (CDEL) announced on Saturday that its material subsidiary, Coffee Day Global Limited (CDGL), has reached an in-principle One-Time Settlement (OTS) with RARE Asset Reconstruction Company Limited (RARE ARC).
The settlement is aimed at resolving outstanding debt originally held by a consortium of lenders, including Karnataka Bank Limited, RBL Bank Ltd, and Kotak Mahindra Bank Limited, which had subsequently been assigned to the ARC.
As per the regulatory filing submitted to the exchanges, the total settlement amount has been pegged at ₹40,00,00,000 (Forty Crore) as a full and final payment for all dues. The payment structure is divided into two distinct tranches:
Tranche I: ₹25 crore is payable immediately upon the acceptance of the OTS. This initial payment is proposed to be funded through the sale of mortgaged land.
Tranche II: The remaining ₹15 crore is scheduled to be paid within one year from the date of acceptance.
The primary driver behind opting for this settlement is to reduce the overall debt liability of the company. This move follows a series of efforts by the Coffee Day Group to pare down debt since the passing of its founder, V.G. Siddhartha, and aligns with the management’s broader strategy of asset monetization to satisfy creditors.
The company noted that the current arrangement remains subject to final approval and formal documentation.
At the time of the announcement, the company’s stock remains under watch as investors monitor the progress of these recovery efforts. The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.