The Deccan Chronicle Holdings Limited today issued a tender notice in leading national dailies inviting bids from prospective buyers for its IPL franchisee Deccan Chargers, which is currently in a financial mess, but the company did not mention any base price.
According to Deccan Chargers' tender notice, "under this invitation to tender issued by DCHL, the winning bidder will acquire from the DCHL on an "as is where is" basis the right to own and operate the IPL team currently known as Deccan Chargers, which is and will continue to be based in Hyderabad and which competes in the Indian Premier League and which has the opportunity (if applicable and subject to qualification) to compete in each and any CLT20 which is staged from 2013 onwards".
According to the IPL constitution, 5 percent of the bidding amount will accrue by the BCCI. The new potential buyer may have to pay the salary of the Deccan Chargers' players for the fifth edition of the IPL.
A report in Times of India says BCCI has no plans to have a base price for the tender as it is concerned over the prospect of a consortium of ICICI Bank, Yes Bank and another private bank running Deccan Chargers if both the franchise and BCCI fail to attract a buyer. The consortium, which has lent Rs 480 crore to the Chargers, "has told the BCCI that if Chargers fail to find a buyer, they are keen on running the IPL team for at least a year and then decide on its future," the TOI report said.
When BCCI floated tenders in 2008, they had set a base price of Rs 200 crore, following which Deccan Chargers was acquired for Rs 598 crore. The owners, who were earlier hoping to at least get Rs 1,000 crore for the team, are perhaps worried that without a base price, they may have to sell the team for less, if not the same amount even after five years. If the team is sold for less, Deccan Chronicle will have to tap other routes to pay of its creditors.
Clearly the Reddys are in a sticky situation. In addition to the financial woes of Deccan Chronicle and Deccan Chargers, DCHL’s former chief executive Timothy Wright today decided to drag DCHL to a Hyderabad court seeking enforcement of a London court judgment ordering DCHL to pay him around £10.55 million (Rs 97.55 crore) for breach of contract.
This comes at a time when most of the company's assets are mortgaged with banks and financial institutions while it attempts to raise more funds.
"To recover the amount, Wright has sought attachment and sale of various movable and immovable assets and properties of DCHL, including the Deccan Chargers IPL franchise and immovable properties located adjacent to its corporate office at 36, Sarojini Devi Road, at Secunderabad and West Marredpally," another TOI report said.
On Tuesday, the Bombay High Court attached Deccan Chronicles' six bank accounts and restrained it from selling, leasing or creating any third party rights on its properties in Central Mumbai that have been mortgaged to Tata Capital.