The governing council of the Indian Premier League (IPL) today gave a 14-day extension to the Deccan Chargers franchisee to sort its financial mess. Hyderabad-based Deccan Chronicle Holdings, the team’s owner, had earlier mortgaged the team to banks.
Under IPL rules, owners are not allowed to mortgage teams and use the proceeds for other expenses. “Representatives of Deccan Chargers, as well as those from banks, met the IPL governing council to seek a solution. We have given Deccan Chargers two weeks. If they are unable to do so, we will decide on further course of action,” said a Board of Control for Cricket in India (BCCI) official who attended the meeting in New Delhi this evening.
BCCI had recently learnt about the team’s exposure to some lenders, after the banks sought security for their loan to the franchisee. Last week, the governing council discussed the issue, but failed to reach a consensus.
“Deccan Chronicle has loans of about Rs 1,000 crore, with Corporation Bank and Industrial Finance Corporation of India (IFCI) having major exposure,” said an official at a public sector bank. Last week, IFCI had filed a winding-up petition against the company in the Andhra Pradesh High Court. BCCI officials said by mortgaging their IPL franchise, Deccan Chronicle had taken loans of Rs 480 crore and Rs 170 crore from two private banks. The owners have been looking to sell stake in the franchise since the past two years, without any success. Recently, they appointed Religare Capital to find a buyer.
Deccan Chronicle Chairman T Venkattram Reddy declined to comment.