Four newspapers include the Asian Age.
By R. Chandrasekaran
CHENNAI: Close on the heels of a consortium of banks recovering loans from the troubled air carrier Kingfisher Airlines, the Hyderabad-based Deccan Chronicle Holdings Ltd. (DCHL) is now in deep financial trouble. The company owned brands are up for sale.
The company, DCHL, which runs Deccan Chronicle, a daily from South India, has created a charge through the hypothecation of the trade marks such as Deccan Chronicle, Financial Chronicle, Asian Age, and Andhra Bhoomi. They had sought a term loan of Rs.2.5 billion from the IDI Bank earlier.
Now that the company and its other co-owners have failed to repay the loan, IDBI Bank has put out a notice of an auction for sale on Tuesday of the four newspaper tiles owned by DCHL.
The bank has fixed August 27 as the final date for receiving the bids and indicated that the highest bidder would get the four newspaper titles.
The public sector bank had launched a similar exercise in February this year. However, the Debts Recovery Tribunal (DBT) had stayed it following the objections from other lenders. DCHL’s debt is estimated to be about Rs.40 billion to 18 lenders.
The lenders have approached DBT and the courts for winding up of the media company and attach properties of DCHL’s promoters.
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Last month, possession of the property belonging to T. Urmila Reddy, mother of T.Venkattram Reddy and T.Vinayak Reddy, who are the promoters, was taken over by Indiabulls Housing Finance after DCHL failed to repay dues of Rs.930 million.
DCHL had also lost the franchisee status of the lucrative Indian Premier League’s (IPL) cricket team, Deccan Chargers, after it failed to pay the dues to players in 2012 edition. The Indian cricket board has terminated the franchise agreement with DCHL and floated a fresh tender that allowed Chennai-based media group Sun TV to own a cricket team.
The company is having serious financial problems for more than a year now. Canara Bank had alleged irregularities in DCHL balance sheet prompting the Central Bureau of Investigation (CBI) to start a probe three months back. The bank had complained that the balance sheet failed to reflect all the loans lent by it after a forensic audit of the accounts. The public sector bank had lent Rs.3.4 billion to DCHL.
Now that the four brands are up for sale, DCHL will have to search for a new brand and run the company until other lenders allow them to do so. However, it is quite unlikely that the lenders will give a free hand to the promoters to choose some other brand and run the newspapers. Each and every lender will try to sell the property and the company and recover whatever possible.
To contact the author, email to rchandrasekaran@americanbazaaronline.com