Coffee Day Enterprises has settled a Rs 25 crore loan with Kemfin Services through a one-time settlement. The company informed stock exchanges about the deal on October 1.

The company said it has signed a settlement agreement and paid Rs 25 crore as full and final settlement of all outstanding dues to the lender. The move is part of its ongoing effort to reduce debt.

Kemfin, a Bengaluru-based investment and finance company, had extended the Rs 25 crore loan to Coffee Day Enterprises. Reports say the borrowing was unsecured but carried the personal guarantee of the late founder V.G. Siddhartha, with interest at 15 per cent a year and a penal rate of 24 per cent on delays.

Coffee Day Enterprises, the parent of the Cafe Coffee Day chain, has been working to cut its liabilities through asset sales, lender settlements and repayments after the group's financial troubles in recent years. The filing did not disclose the total dues owed before the settlement.