Cricket associations in India are believed to be sitting on neat cash piles. For proof, consider the Board of Control for Cricket in India (BCCI)’s hefty earnings. But at least one association, the Maharashtra Cricket Association (MCA), is an exception.
A delay in payments by the Sahara Group’s Sahara Adventure Sports Ltd for its cricket stadium in Pune has put the cricket body on a sticky wicket. The MCA, an affiliate of the BCCI, is finding it difficult to service loans on time, prompting rating agency CRISIL to downgrade its rating to “D” from “BB”.
In a statement, CRISIL said the MCA, in the year 2010-11, entered into an agreement with Sahara for granting various rights for the cricket stadium at Gahunje-Pune for a consideration of about Rs 210 crore. Under the agreement, the MCA was expected to get about Rs 160 crore till September 2012. It received only about Rs 90 crore, CRISIL said. “D” indicates instruments with this rating are in default or are expected to be in default soon. “BB” indicates moderate risk of default pertaining to timely repayments.
The rating factors in the MCA’s unstable cash flows, and inadequate debt protection metrics. There is also high dependence on the BCCI for revenues. These weaknesses were mitigated by the benefits the MCA derived from its full-time membership status with the BCCI and its reputed trustees, CRISIL said.
The MCA, set up in 1935, is one of the 25 full-time members of the BCCI, the apex body for administering cricket in India. The MCA is the cricket controlling body for Maharashtra with the exception of Vidharbha, Mumbai, and Thane.
The MCA reported a surplus of Rs 10.6 core on total receipts of Rs 25.3 crore for 2011-12. It had reported a surplus of Rs 11.2 crore on an operating income of Rs 22.6 crore in 2010-11.
The BCCI reported a surplus of Rs 382.86 crore on total income of Rs 849.44 crore in 2011-12. The surplus was Rs 189.73 crore on total income of Rs 581.29 crore in 2010-11.