Coffee Day Global shares rise 16% after averting insolvency proceedings
Shares of Coffee Day Global rose 16% on the NSE by mid-day on September 13, after the company averted insolvency proceedings and reached a settlement with IndusInd Bank. As of 1:10pm, the shares were trading at Rs 50, up from Tuesday’s close of Rs 42.75.
The company and the bank informed the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) on September 13 that they had withdrawn the insolvency litigations after reaching a settlement.
The NCLAT had stayed an order allowing Coffee Day Global to be admitted to the insolvency process on August 11. The NCLAT noted that it had found certain arguable points that called for clarifications and asked IndusInd Bank to file its response in two weeks.
The Bengaluru bench of the National Company Law Tribunal (NCLT) had admitted Coffee Day Global, which runs the Cafe Coffee Day chain, to insolvency on July 20 after IndusInd Bank moved a petition alleging default on Rs 94 crore.
The settlement between Coffee Day Global and IndusInd Bank is a positive development for the company and its shareholders. It will allow the company to focus on its business and emerge from the insolvency process stronger.
The settlement is also a relief for the employees of Coffee Day Global, who were worried about their jobs. The company has said that it will continue to operate its businesses as usual and that there will be no job losses.
The settlement is a win-win for both parties. IndusInd Bank will get its money back, and Coffee Day Global will be able to avoid liquidation and continue as a going concern.
It remains to be seen what the terms of the settlement are. However, it is clear that this is a positive development for Coffee Day Global and its stakeholders.
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Market Update for September 22, 2023
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