Coffee Day Enterprises Ltd (CDEL) has reported a total default of Rs 433.91 crore in the first quarter of FY25.

This default includes both interest payments and principal repayments on loans from banks, financial institutions, and unlisted debt securities such as Non-Convertible Debentures (NCDs) and Non-Convertible Redeemable Preference Shares (NCRPS).

The company attributes the delay in debt servicing to a severe liquidity crisis.

CDEL has been struggling with its financial obligations for some time.

According to the company's regulatory update, the amount of default has remained consistent with previous quarters because CDEL has not been accruing interest since April 2021.

The company stated, "Due to default in repayment of interest and principal to the lenders, the lenders have sent 'loan recall' notices to the company as well as initiated legal disputes.

In view of the loan recall notices, legal disputes and pending one-time settlement with the lenders, the company has not recognised interest from April 2021."

Breaking down the total default, CDEL reported a default of Rs 183.36 crore on the principal amount of loans or revolving facilities like cash credit from banks and financial institutions as of June 30, 2024.

Additionally, it has defaulted on Rs 5.78 crore in interest payments for these loans.

For unlisted debt securities, such as NCDs and NCRPS, the company has defaulted on Rs 200 crore of the principal amount and Rs 44.77 crore in interest payments.

CDEL has been navigating financial turmoil since the death of its founder and Chairman, V G Siddhartha, in July 2019.

Following his demise, the company faced significant challenges in managing its debt. In March 2020, CDEL announced that it had repaid Rs 1,644 crore to 13 lenders after selling its technology business park to Blackstone Group.

In addition to its efforts to reduce debt through asset sales, CDEL is also involved in legal proceedings to recover over Rs 3,535 crore.

This amount was allegedly siphoned out of the company into Mysore Amalgamated Coffee Estates Limited (MACEL), a personal firm promoted by the late V G Siddhartha.

The ongoing legal battle aims to recover these funds and improve the company's financial health.

The road to financial stability for Coffee Day Enterprises remains fraught with challenges.

The company's efforts to restructure its debt and recover siphoned funds are critical to its long-term viability.

As CDEL continues to address its liquidity crisis and navigate legal disputes, stakeholders are closely monitoring its progress in resolving these significant financial issues.