The sole bidder for Deccan Chargers offered offer to pay Rs 900 crore to buy the Indian Premier League side but this was rejected because the lenders insisted on a bank guarantee, a person aware of the development told ET.
PVP Ventures, whose business interests include finance, entertainment, real estate and power generation, offered to pay Rs 450 crore in cash and the rest in the form of convertible debentures.
When the lenders to the owner of Deccan Chargers insisted on a bank guarantee, a deal could not be struck, the source said, adding that such a condition was not present in the bid document.
N Srinivasan, the president of the Board of Control for Cricket in India, said that the terms and conditions were not acceptable to Deccan Chronicle Holdings, the owner of Deccan Chargers.
ET has not been able so far to verify this claim with ICICI Bank, one of the main lenders, or Venkatram Reddy, the chairman of Deccan Chronicle Holdings.
Banks and financial institutions are owed about Rs 5,000 crore by Deccan Chronicle Holdings, the owner of Deccan Chargers. It has put the Hyderabad-based team on the block to stave off bankruptcy after defaulting on loans and having its credit rating downgraded to junk status. Its accounts are being forensically audited to check for potential wrongdoing.
The company's stock closed down 1.7% on the BSE on Thursday, giving it a market value of Rs 226 crore.
Deccan Chronicle Holdings bought its Twenty20 side in 2008 for $107 million, or Rs 590 crore at today's rates. It was the third most expensive IPL franchise to be bought that year after Mumbai and Bangalore. The company publishes Deccan Chronicle, Financial Chronicle, Asian Age and the Telugu daily Andhra Bhoomi.
PVP Ventures, which claims net worth of over Rs 2,000 crore, is headquartered in Chennai and founded by Andhra Pradesh-based serial entrepreneur Potluri Vara Prasad. He is the producer of bilingual Tamil and Telugu film Naan Ee which is running to packed houses in south India.
The only conditions regarding cash payments in the bid document pertained to Rs 9 crore on the day of bids being opened and around 35 crore of liabilities to the players of the IPL team, the source said.
Source: Economic Times
