In an announcement at the Bombay Stock Exchange, DCHL said, "Pursuant to its Meeting of the Board of Directors held on October 11, 2012, it was resolved to authorize the Board of Directors to sell, transfer/ dispose off the Deccan Chargers Franchise business undertaking(s)/ business division of the Company to Kamla Landmarc Real Estate Holdings Private Limited."
The company said it has approved the draft memorandum of understanding placed before the Board of Directors at its October 11 meeting. The company, however did not disclose the details of the financial.
Jitendra Jain, managing director of Kamla Landmarc, remained unavailable for comments. A source who is aware of the development confirmed that the talks were on for a few days and the deal got finalised over the last couple of days.
DCHL shares reacted immediately and jumped 4.9 per cent on the news and were trading at day's high of Rs 9.6 per share on Friday.
Barely a month ago, Deccan Chargers owners DCHL rejected a Rs 900 crore bid from a film production company PVP Ventures. BCCI had said that both the price and the terms of the payment were not acceptable to them.
Stressed under high debt of over Rs 4,300 crore, DCHL has been looking to raise funds in order to meet its liabilities. It recently defaulted on its payments to some financial institutions.
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Deccan Chargers risks losing IPL franchise if it fails to pay guarantee by Friday
The owner of the IPL team Deccan Chargers, Deccan Chronicle Holdings Limited (DCHL), is under the risk of losing its IPL franchise if it fails to cough up the Rs 100 crore bank guarantee to the Board of Control for Cricket in India (BCCI), said a banker close to the development.
“This is an irrevocable and unconditional bank guarantee towards the expenses for IPL series-6 including making payments to BCCI to players and support team costs. If DCHL fails to come up with the guarantee its IPL contract could be revoked,” said the banker. The 6th edition of the IPL is expected to be played out in April-May next year.
DCHL was on October 1 directed by the Bombay High Court to submit the bank guarantee by October 9. The high court observed that the BCCI's earlier decision (made in September) to terminate the Deccan Chargers IPL franchise was taken in haste.
The direction was passed by Justice S J Kathawala while hearing a petition filed by DCHL challenging BCCI's decision to terminate the contract of cash-strapped Hyderabad company.
On October 9, at the request of DCHL, the high court granted the company three more days to come up with amount. The guarantee is expected to be in force for a period of one year.
DCHL is currently said to be in talks with some banks to win the guarantee. An official from an existing private sector lender to DCHL said that if they were to lend to the company, the bank would expect a quid pro quo for taking further loan exposure in the debt ridden company. “We will ask for favourable terms during the settlement of dues or claims or any other quid pro quo measures,” the official said.
Another source said that in all likelihood it is a private bank which is willing to give a guarantee and not a nationalized bank. “The management is planning to move a petition in the court to raise bank guarantee and is in talks with ICICI bank for the same,” the source added.
Some public sector bankers say that they are awaiting a forensic report from Canara Bank before undertaking further proceedings or exposures with the bank. According to sources T Venkattram Reddy, Chairman, has pledged most of his movable and immovable properties even while the value is yet to be ascertained, ``We are awaiting the forensic audit report and will then initiate legal action against the management" said a public sector banker.
The consortium of 21 lenders to the debt-ridden media company late last month failed to reach a consensus on admitting DCHL into the CDR cell. The lenders have an exposure of around R4,100 crore to Hyderabad based DCHL, which has been looking for easier terms to repay its borrowings. The empowered group of the corporate debt restructuring (CDR) cell will meet again on October 19, when the Deccan Chronicle Holdings Limited (DCHL) case will be taken up for discussion.
ICICI Bank has the largest exposure at Rs 490 crore, followed by Axis Bank at Rs 400 crore, Canara Bank at Rs 330 crore, Andhra Bank at Rs 200 crore, YES Bank at Rs 175 crore, IndusInd Bank at R100 crore, Kotak Mahindra Bank at R100 crore, Indian Overseas Bank at Rs 100 crore, Corporation Bank at Rs 100 crore, amongst others.
Some non-banking lenders include Religare Enterprises with an exposure of Rs 150 crore, Future Capital at R150 crore, SBI Pension Fund at Rs 50 crore, IFCI at Rs 27 crore etc.
DCHL's revenues in the year to March 2012 stood at Rs 869.4 crore while the firm posted a net profit of Rs 61 crore. In the previous year, the revenues stood at Rs 1030.91 crore and profit was Rs 163 crore.
By Pranav Nambiar, BV Mahalakshmi