The new management of Coffee Day Enterprises (CDE) might tender additional shares as collateral to bond investors, reports by The Economic Times.
Representatives of bond investors have met the management, and some debt investors have sent formal notices regarding additional collateral, sources told the paper.
Some fund houses and non-banking finance companies (NBFCs) have invested in bonds sold by CDE, the report said.
CDE, which runs India’s largest café chain, had appointed a new management after the death of its founder VG Siddhartha.
Moneycontrol could not independently verify the story.
“Investors want additional collateral on their investments, which could happen next week once the new management takes over,” a source told the publication.
CDE has about 3-13 days to decide on the additional collateral, as per the terms of the bond subscription, the report said.
Given that the stock has fallen 50 percent 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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