Coffee Day Enterprises, the parent of Cafe Coffee Day, has paid Rs 25 crore to Kemfin Services to close a loan in a one-time settlement.

Coffee Day Enterprises Limited, or CDEL, told the exchanges about the deal on 1 October.

It signed a settlement agreement with Kemfin Services and paid Rs 25 crore as full and final payment of all dues owed to the lender.

In plain terms, a one-time settlement means the borrower pays an agreed lump sum to close a debt for good.

Both sides then consider the matter finished. The company said it took this step to reduce its debt.

It has been working to cut what it owes through asset sales, settlements with lenders and repayment of borrowings, after the financial troubles the group faced in recent years.

Kemfin is a Bengaluru-based investment and finance company. It had lent Rs 25 crore to CDEL.

According to the company’s annual reports, the loan carried interest and had been given repayment extensions in the past.

Media reports say the loan was unsecured but backed by a personal guarantee from the late founder VG Siddhartha.

They also put the interest rate at 15% a year, rising to 24% on late payments. The company’s filing does not mention these terms.

Several key details are missing. The filing does not say how much CDEL owed Kemfin before the settlement. So it is not possible to work out how big a discount the company got, if any.

It also does not reveal where the Rs 25 crore came from, or how much debt the group still carries.

This is one loan settled, not the whole debt cleared. The filing confirms only the Kemfin deal.

The next thing to watch is whether CDEL strikes more settlements with other lenders and brings its total borrowings down.

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