There is more trouble ahead for the Reddys' owned Deccan Chronicle Holdings (DCHL). Its shares hit the lower circuit on Wednesday before recovering marginally, closing at Rs 11.03, down Rs 1.22 or about 10 per cent.
The sharp fall comes just a day ahead of the scheduled auction for the sale of its Indian Premier League cricket team, Deccan Chargers, through which the debt-ridden company hopes to liquidate some of liabilities to get over the immediate crisis.
The spate of bad news has continued for some time. The recent slide in the prices was triggered by a finance ministry official's statement that the actual debt would be around Rs 5,000 crore, more than three times the Rs 1,500 crore filed earlier with the registrar of companies.
In the past three days, the share prices of DCHL have fallen 24 per cent and in two months by a whopping 62 per cent.
|CUP OF WOES|
The central government recently stated that a forensic audit of the accounts and debts by Canara Bank, the lead banker of the lenders' consortium, was under way to study if there had been a systemic failure. Yesterday, the Bombay high court directed the IPL sale proceeds be deposited with ICICI Bank, after paying five per cent to the Board of Control for Cricket in India. That triggered heavy selling.
Last week, a consortium of 28 banks reportedly met to discuss the liabilities of DCHL. However, there was no conclusion.
Apart from these fresh problems, the management is facing a criminal charge in a case filed by Karvy Broking, accusing it of forgery and breach of trust. The winding-up petition filed against the company by IFCI is also expected to come up for hearing at the Andhra Pradesh high court this week.
DCHL revenues for the financial year ended March 2012 were Rs 869 crore.