The saga of Malavika Hegde who stopped Cafe Coffee Day from dying
The news of V G Siddhartha, CEO of India’s most famous coffeehouse chain, Cafe Coffee Day, death left people in shock. A typewritten note was found after Siddhartha’s death which had revealed how much he was under debt.
In his note, he had mentioned “failing to create the right profitable business model.” It was then clear that he was under pressure from private equity partners and other lenders. While there was a debt of Rs.2603 crore on CCD, the total debt stood at Coffee Day Enterprises Limited (CDEL), the parent company of CCD, which stood at Rs.7200 crore as of March 2019.
At the backdrop of such huge calamity, Malavika Hegde, wife of late Siddhartha, took over the reins of the company keeping the grief of her husband’s loss aside. Malavika, a grief-stricken woman, decided to stand up to her problems instead of running away and fleeing abroad.
Many thought that Cafe Coffee Day would not survive after Siddhartha’s death. Many believed the company will not recover because of the accumulated debt. But, Malavika Hegde, stood up to fulfill her husband’s dream.
In 2020, before taking over the company as the CEO, she wrote a letter to the company’s 25,000 employees. Malavika wrote that she was committed to the future of the company and assured that the Cafe Coffee Day story was “worth preserving”. She wrote, “We will work to reduce the debt to a manageable level by selling a few more investments as I am committed to the company’s future.”
Amid the COVID-19 pandemic, when many businesses faced the toughest of challenges, Cafe Coffee Day managed to grow even during the pandemic. Malavika maintained the brand’s value and built relations with many new investors to infuse capital into their business and is able to convince the investors that the brand of CCD was worth preserving.
Malavika’s firm resolution to bring CDEL out of the debts started showing results. The recent annual reports of the company mentioned that its net debt was Rs.1,731 crore as of March 31, 2021. The report read, “The total loan funds stood at Rs.1,779 crore which comprises of long-term borrowings of Rs.1,263 crore and short-term borrowings of Rs.516 crore.”
Malavika’s goal is to make CCD a multi-billion-dollar company without the debt burden. Following in the footsteps of her late husband, Malavika’s dream has become to move coffee day shops to every corner of the country.
Presently, Cafe Coffee Day (CCD) owns 572 cafes across the country, along with 333 CCD Value Express kiosks. It is a huge business with over 36,000 vending machines serving coffee to CCD customers.
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