Bankers to back Deccan Chargers in IPL 6
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Deccan Chargers is likely to play in Season 6 of the Indian Premier League (IPL), with bankers agreeing to back the team for the forthcoming season, subject to the BCCI agreeing to clear the proposal at its Working Committee meeting on Saturday.
Bankers are on the same page as the Chargers, a source revealed, even as Deccan Chronicle Holdings turned down the bid of a single obscure bidder, PVP group, who reportedly offered Rs 900 crore for the franchise at the scheduled re-auction here on Thursday.
While BCCI said the bidder satisfied its eligibility and suitability criteria, it is believed that Deccan Chronicle Holdings Limited — and the bankers — could not countenance a bid that involved payment of Rs 450 crore in five installments of Rs 90 crore each year from December 2012.
The other half was to be paid in a financial instrument called a non-cumulative compulsory convertible debentures (CCDs). There were to be converted into 10 per cent fully diluted paid-up equity share capital of a special purpose vehicle (SVP) on December 30, 2022.
The bid was seen as too complicated and risk-laden, as neither bank guarantees nor collateral was offered by the bidder.
The source revealed that the bidder’s credentials might be questioned; the promoter is listed as the 19th accused in the Y.S. Jagan Mohan Reddy illegal investments case that is being investigated by the CBI. The group has also invested in Sakshi Publications.
Considering the possible risks involved in a long-term deal, rather than straightforward cash-and-carry terms, the team owners may have decided it was safer to go with the bankers who have lent money on the team to the owners, sources said.
The bankers are reported to be in a position to satisfy all BCCI stipulations by making contracted payments to the players. A consortium of bankers has got together to come up with this proposal to fund Chargers till Season 6. Suitable guarantees will also be offered by them to BCCI.
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