Coffee Day Enterprises may tender added shares as collateral to bond investors


A news report shows that the new management of Coffee Day Enterprises (CDE) might tender additional shares as collateral to bond investors.

Delegates of bond investors have met the administration, and some debt investors have sent formal notices regarding added collateral.

The update is such, some fund houses and non-banking finance companies (NBFCs) have invested in bonds sold by CDE.

Coffee Day Enterprise, which runs India’s largest café chain, had appointed new management after the death of its founder VG Siddhartha.

“Investors want additional collateral on their investments, which could happen next week once the new management takes over,” a source informed the media house.

CDE has about 3-13 days to decide on the added collateral, as per the terms of the bond subscription.

Given that the stock has fallen 50% over the past one week, the cover has slipped below investment value.

ICRA on July 31 revised its rating to ‘watch with negative implications’ on CDE’s loans aggregating Rs 315 crore.

On July 31, the CDE board appointed SV Ranganath as interim Chairman and Nitin Bagmane as interim COO.



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