Creditors of Deccan Chronicle Holdings Ltd., the Indian newspaper publisher struggling to repay $919 million of debt, may appoint managers to run the firm’s cricket team after failing to find a buyer.
The lenders are likely to meet the Board of Control for Cricket in India today to discuss the strategy to allow Deccan to keep the team, said three people familiar with the matter, asking not to be identified as talks are confidential. The company, which has pledged at least 60 percent of its shares to lenders, on Sept. 13 rejected the sole bid it got at an auction for the Deccan Chargers team.
The creditors are speculating that the publisher of the Financial Chronicle, Asian Age and the Deccan Chronicle newspapers may get higher bids for the Indian Premier League cricket team at a later date, the people said. Deccan Chronicle is looking to sell assets to repay 50 billion rupees ($919 million) of debt after saying last month that it’s facing a “liquidity crisis.”
The team representing Hyderabad city in the league makes a profit of about 80 million rupees a year, one of the people said. Should the lenders decide to support the team, they will have to finance its operations of about 1 billion rupees a year and oversee the team, the person said.
Deccan Chronicle gained 0.5 percent to 10.85 rupees in Mumbai yesterday. The stock has dropped 70 percent this year.
At the auction, the unidentified bidder offered to buy the team and pay the amount over five years, the person said. The terms of the offer were not “agreeable” to the company, N. Srinivasan, president of the Board of Control for Cricket in India, said in Chennai on Sept. 13.
Three calls made to team co-owner Gayatri Reddy weren’t answered. Deccan Chronicle’s Vice Chairman Vinayak Ravi Reddy didn’t answer a call made to his mobile phone.
Deccan Chronicle in 2008 agreed to pay 4.3 billion rupees for Deccan Chargers. Sahara Adventure Sports Ltd. bought Pune Warriors for $370 million in March 2010, according to the team’s website.
The owners of Deccan Chronicle have pledged 45 percent of their stake in the company to ICICI Bank Ltd., according to stock exchange filings. Religare Finvest Ltd. in a filing said it controls 14.5 percent of the publisher.