Banks look to future as HC backs Deccan Chargers termination

Cash-strapped Deccan Chronicle Holdings (DCHL) will not be able to keep alive the Deccan Chargers, an Indian Premier League franchise, after the Bombay High Court on Thursday upheld the Indian cricket board's decision to terminate the franchise. The news comes as a blow to the consortium of lenders to the company, which would have benefitted from a sale of the franchise that reportedly commands a price of about R1,000 crore.

Bankers are scheduled to meet on October 19 to figure out how the firm can be given easier repayment terms. This is the second time banks will meet under the auspices of the corporate debt restructuring (CDR) cell to review DCHL's case. The consortium of 21 lenders to the debt-ridden media company, with a total exposure of R4,100 crore, failed to reach a consensus on admitting DCHL into the CDR cell when they met late last month. Some of the bankers are awaiting the forensic audit of accounts by Canara Bank before taking a final call on DCHL's CDR proposal.

Tata Capital in September this year dragged DCHL to the Bombay High Court seeking to recover R100 crore in dues. ICICI Bank has the largest exposure at R490 crore, followed by Axis Bank at R400 crore and Canara Bank at R330 crore. Other exposures include those of Andhra Bank at R200 crore, YES Bank at R175 crore, IndusInd Bank at R100 crore, Kotak Mahindra Bank at R100 crore, Indian Overseas Bank at R100 crore and Corporation Bank at R100 crore. Some non-banking lenders include Tata Capital which has lent R100 crore, Religare Enterprises, whose exposure is R150 crore, Future Capital which has lent R150 crore, SBI Pension Fund with an exposure of R50 crore and IFCI from which the company borrowed R27 crore.

Earlier, on October 12, a court-appointed arbitrator justice CK Thakkar had passed an order granting status quo till October 17 on the Board of Control for Cricket in India (BCCI) decision to terminate the Deccan Chargers team. This came after the high court refused to give an extension to DCHL for providing a R100-crore bank guarantee and keep the franchise alive in the lucrative cricket league.

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