The consortium of lenders to the debt-ridden media company Deccan Chronicle Holdings Limited (DCHL) on Tuesday failed to reach a consensus on admitting the firm into the corporate debt restructuring (CDR) cell. The Hyderabad-based firm owes banks R5,000 crore, according to recent finance ministry estimates, and has been looking for easier terms to repay its borrowings. The company?s revenues in the year to March 2012 stood at R869.4 crore while the firm posted a net profit of R61 crore. In the previous year the profit was R163 crore.
Only three banks agreed to a restructuring package, a banker told FE, adding it was the banks with the larger exposures that had shown a greater willingness to go ahead with a recast, a banker close to the development said. ?A few of the banks with a relatively large exposure are keen to restructure the debt,? he said. Among 21 banks in the consortium are ICICI Bank, Axis Bank, Canara Bank, Yes Bank,Corporation Bank and Andhra Bank.
Around 14 banks are believed to have attended the CDR meeting on Tuesday. Some bankers are understood to be awaiting the forensic audit report being undertaken by Canara Bank into the accounts of the company before taking a final call on the recast. The CDR cell will meet again next month to discuss DCHL?s restructuring though a date has not yet been fixed.
In a related development the BCCI and DCHL are expected to settle their dispute over the termination of the IPL franchise by referring the matter to an arbitrator. This was after the the Bombay High Court on Monday suggested that the matter be resolved through a mutually acceptable arbitrator.
According to a recent report by Standard Chartered, YES Bank is the only bank to have clarified that collateral backing its loan is clean and realisable. The report adds that DCHL is facing legal action based on cases filed by financial institutions for allegedly mortgaging the same set of shares and borrowing money from them.
In June, CARE Ratings downgraded both the long-term and short-term bank facilities of Deccan, after the company defaulted on its short term non-convertible debentures.
