CDEL's liabilities at over Rs 5,200 cr; over 75 per cent promoter shares pledged

New Delhi: Coffee tycoon VG Siddhartha's flagship Coffee Day Enterprises Ltd (CDEL) had seen its current liabilities double to over Rs 5,200 crore last fiscal, while his unlisted ventures for realty and hospitality may have similar levels of debt, according to regulatory filings with stock exchanges and the corporate affairs ministry.

Siddhartha, who went missing and his body was found on Wednesday after 36-hours of intense search, had a number of entities that borrowed money from a gamut of organisations, including banks and financial institutions, for his non-coffee businesses.

A letter, purportedly written by him, had surfaced after he went missing on Monday evening that cited pressure from banks, investors and tax authorities.

"I would like to say I gave it my all. I am sorry to let down all the people that put their trust in me. I fought for a long time but today, I gave up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend," Siddhartha purportedly wrote in the letter.

BSE-listed Coffee Day Enterprises Ltd (CDEL) had a total current liability of Rs 5,251 crore as on March 31, 2019, up from Rs 2,457.3 crore a year back, as per a filing to the bourse. CDEL's promoter companies -- Devadarshini Info Technologies, Coffee Day Consolidations, Gonibedu Coffee Estates and Sivan Securities -- had also borrowed heavily from time to time.

A series of filings to the corporate affairs ministry showed him taking loans of as low as Rs 12 crore, and borrowing from institutions like Tata Capital Financial Service Ltd and Clix Capital Services (Formerly GE Money Finance Services), as well as Shapoorji Pallonji Finance (SPF).

One such filing from April 2018 says SPF had in principle agreed to "provide financial assistance by way of loan against securities facility not exceeding Rs 12 crore..." to Tanglin Developments Ltd (a subsidiary).

Another document mentions a loan agreement for Coffee Day Hotels and Resorts, where Clix Capital had agreed "to provide a term loan facility for an aggregate principal amount of up to Rs 1 lakh".

While the exact quantum of the borrowings by the unlisted companies of Siddhartha could not be immediately ascertained, the total as indicated by the filings would be in addition to the amount CDEL owed to lenders.

Siddhartha's borrowings appear to have intensified after 2017 although there is no indication of how many of them remain unpaid after their due date or have turned non-performing assets. According to data filed with the ministry, Coffee Day Consolidations had short-term borrowings and current liabilities of Rs 36.53 crore at the end of March 2018.

As such, over three quarters of the shares held by V G Siddhartha and promoter group entities in Coffee Day Enterprises Ltd (CDEL) have been pledged to institutions with the founder pledging additional shares as recently as June this year.

Siddhartha held 32.7 per cent stake, his wife Malavika Hegde owned 4.05 per cent and four other promoter group companies -- Devadarshini Info Technologies, Coffee Day Consolidations, Gonibedu Coffee Estates and Sivan Securities -- held a little over 17 per cent share in CDEL at the end of June. This brought their combined holding to 53.93 per cent in the company.

The promoter entities had pledged as much as 75.7 per cent (or 8.62 crore shares) of their total holding in the company, with Siddhartha creating a fresh pledge of 1.39 per cent (29.2 lakh shares) as recently as the end of June.

The pledge of shares in favour of Kotak Mahindra Bank was for borrowings availed from Kotak Mahindra Investments Ltd "in connection with the borrowings availed by Group companies".

Almost all of the shares held by Sivan Securities (0.21 per cent stake) in CDEL have been pledged. Similarly, Coffee Day Consolidations held 5.81 per cent in the company and nearly 95.96 per cent of this was pledged as on June 30, 2019.

Devadarshini Info Technologies and Gonibedu Coffee Estates had 83.07 per cent and 78.9 per cent of their shareholding pledged, respectively, data showed.

CDEL is yet to announce its June quarter earnings -- it had informed the exchanges that its Board would meet on August 8 to consider and approve standalone and consolidated results for the quarter ended June 30, 2019.