5 months ago ~40 views
There has been lot of PR about debt reduction on $Coffee Day Enterprises Ltd on social media. But at the end of the day the fact of the matter is that 3500 cr was transferred to promoter group co (out of which only 850 cr was disclosed and balance came into light as part of the investigation) which never came back to the company (see image).

Further, the debt reduction was not made out of any operating cash flows or promoters infusing any funds in the co but through sale of stake in Mindtree to L&T, sale of IT park to Blackstone and sale of Way2Wealth to Shriram Group.

The most that promoters lost was that their pledged stake was invoked by lenders. So if one considers the diversion of funds from the co which never came back, one can conclude that promoters got a good valuation for their invoked shares indirectly.


5 months ago ~30 views
If you look at it closely, even today things are not as rosy as they are being painted.

> Co is incurring operating losses as revenues have collapsed completely (revenue for Q2 was less than 150 cr)
> Co is in continuing default of loan dues & statutory dues. Some of the lenders have classified the loan account as fraud and others have approached NCLT for recovery.
> One of material subsidary Sical Logistics has gone into NCLT proceedings and hence has ceased to be subsidiary which means a complete write off for the co.
> Foreign subsidiaries have gone into liquidation
> Shares in other 2 material subsidiaries have been invoked by the lenders (however co is still consolidating them in books)
> Agreement to sell the CCD chain has not gone through and cancelled by buyer

Really don't understand what is the cause of optimism in the social media posts.
$Coffee Day Enterprises Ltd

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