Deccan Chronicle debt recast plan off the table

Last Updated: Fri, Oct 19, 2012 19:41 hrs

Ending months of uncertainty, the plan to restructure loans to Deccan Chronicle Holdings is off the table, as the leading lender to the group, ICICI Bank, has withdrawn the proposal.

Earlier, lenders to the company had considered restructuring the loans of about Rs 2,300 crore of the Hyderabad-based company. However, the plan failed to get the support of lenders. The total exposure of the lenders to the company is about Rs 5000 crore.

According to the terms and conditions governing the corporate debt restructuring process, at least three-fourths of the lenders have to agree on the restructuring programme.

The case was discussed by the lenders at two meetings. At the last meeting, the banks had postponed a decision, as several banks said they were awaiting a report on the forensic audit of Deccan Chronicle Holdings by Deloitte, expected by the end of this month. The audit was commissioned by Canara Bank.

A senior official at a private bank said he was not surprised loan-restructuring proposal was off the table, considering the complexities in the accounts of the company. A public sector bank associated with the debt restructuring proposal for Deccan Chronicle Holdings said, “If the audit establishes fraud in the company, it won’t be considered for CDR (corporate debt restructuring).”

Axis Bank had classified its loans to Deccan Chronicle Holdings as non-performing assets in the quarter ended September and has already made adequate provisions against the exposure.

SC on team’s termination from IPL
The Supreme Court on Friday refused to stay the termination of the Hyderabad team by the Indian cricket board from the cash-rich IPL, paving the way for filling its slot by fresh auction on October 25. The apex court declined to interfere with yesterday’s Bombay High Court decision which had set aside the status quo order passed by an arbitrator on cessation of its membership in the league.

A bench headed by Chief Justice Altamas Kabir dismissed the plea of Deccan Chronicle Holdings Limited (DCHL), promoter of Deccan Chargers, to extend the time till October 25 for furnishing the bank guarantee of Rs 100 crore.

It accepted the submission of the BCCI that the termination of contract between the Deccan Chargers and the Board had come into effect from October 12, the day the High Court had held that the arbitrator had no jurisdiction to grant status quo and declined to grant extension of time for furnishing the bank guarantee.

BCCI clarifies on players’ dues
Meanwhile, BCCI on Friday clarified that all the dues to be paid to the players of Deccan Chargers, whose IPL contract has been terminated by the Board, for the last season had been met.

“The BCCI wishes to clarify that all players’ dues for the last season have been met in respect of players who represented Deccan Chargers in IPL 2012,” Secretary Sanjay Jagdale said in a release.

He said the termination of Deccan Chargers from the IPL stands after the Supreme Court on Friday refused to stay termination of the team by the Board.

“The Hon’ble Supreme Court has dismissed the SLP (special leave petition) filed by DCHL against the order of 18 October 2012 given by the Hon’ble Bombay High Court which set aside the status quo order of the Learned Arbitrator. Hence the termination of Deccan Chargers remains undisturbed,” he said.

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