With IPL team Deccan Chargers up for sale, Deccan Chronicle plans CDR for loans

Debt-ridden Deccan Chronicle Holdings Limited (DCHL), the Hyderabad-based media house, has decided to approach its bankers for a corporate debt restructuring (CDR) of its outstanding loans on the lines of cash-strapped Kingfisher Airlines as a last-ditch effort to wriggle out of the financial mess.

A decision to this effect was taken at a meeting of the DCHL Board of Directors in Hyderabad on September 7 under the chairmanship of T. Venkattram Reddy.

The DCHL management informed the National Stock Exchange that it is going in for restructuring of the debt by filing an application with the Corporate Debt Restructuring Cell, under the CDR mechanism, as envisaged under Reserve Bank of India (RBI) guidelines.

According to sources, once DCHL files the application, the lenders would form a consortium to study the financials of the company and decide on debt restructuring.

"We will have to examine the terms of restructuring, the methodology of restructuring," Andhra Bank chairman and managing director B. A. Prabhakar told Mail Today.

"As per the RBI guidelines, the consortium of lenders would go into the debt structure of DCHL first and their collaterals. Moreover, 75 per cent of the lenders have to agree for CDR; or, it would be rejected," Prabhakar added.

DCHL has outstanding dues of over Rs 3,270 crore, which it owes 28 lenders, including banks, financial institutions and nonbanking financial institutions.

ICICI Bank is the biggest lender to the DCHL with loan outstanding of Rs 490 crore followed by Axis Bank with Rs 400 crore.

According to sources, DCHL management is confident of convincing the banks for restructuring of debts once auction of its Indian Premier League franchise Deccan Chargers is over.

"The response to the tender notice for the Chargers is quite encouraging and the management hopes to rake in Rs 800 crore to Rs 1,000 crore," sources said.

Courtesy: Mail Today