The Board of Control for Cricket in India (BCCI) has given an extension of 14 days to the Deccan Chargers franchisee to sort out its financial problems. The Hyderabad-based Deccan Chronicle had mortgaged its team to banks to deal with its present crisis.
Last month, BCCI had asked the teams owner and bankers to clear the issues related to mortgage by August 31 or else it would terminate the Indian Premier League contract. "We have given them time to sort out their financial problems and get back to us by September 15," said a BCCI official who attended the meeting.
According to sources, BCCI officials have allowed the franchise owner to sell the team. According to media reports, T Venkattram Reddy, chairman, Deccan Chronicle Holdings Ltd, has said he was in advanced talks with several parties for sale of the IPL franchise.
The Deccan Chronicle group had mortgaged assets of the team to banks to raise funds without the consent of BCCI. Under the IPL contract, the promoters cannot mortgage their team for borrowing money from banks for their other businesses.
However, bankers are not keen to surrender and argued the current rules do not prevent them from having a right on revenues earned by Deccan Chargers through sponsorship and ticket sales.
According to sources, while Deccan Chronicle has borrowed over Rs 3,200 crore from 28 lenders, only two private sector banks and one financial services firm have the right on Deccan Chargers' revenues as collateral against their loans.