DCHL which is reeling under pressure of creditors said it may consider listing the new demerged entity on bourses
Beleaguered Deccan Chronicle Holdings Ltd (DCHL) is in the process of demerging its printing and publication, retail and sporting activities into a separate entity called "Land Interactive Media" registered in Delhi.
According to the information provided to the Andhra Pradesh High Court recently, the city-based media group which is reeling under pressure of creditors said it may consider listing the new demerged entity on bourses.
The court had last month directed the DCHL to conduct a meeting of the shareholders and also the creditors for the purpose of determining the proposal of scheme of demerger.
The High Court in its direction, while appointing justice (Retd) P Durga Prasad as chairman for the meeting, directed the DCHL to hold the meeting from May 6-8 and either in Mumbai or Delhi.
DCHL which is engaged in printing and publishing of 'Deccan Chronicle', 'Financial Chronicle', 'Andhra Bhoomi' and 'Asian Age' newspapers is facing rough weather after some lenders of the city-based company filed complaints in various courts and forums for alleged default of payments.
DCHL also owns sports and entertainment business under 'Deccan Chargers' brand name and Odyssey retail stores across the country.
"Currently the applicant company (DCHL) is facing financial difficulties and is intending to address the concerns of all the stakeholders (such as creditors, lenders, shareholders and bankers etc.,) in an amicable manner which, in turn, enables to a large extent in carrying on the business in a variable manner," DCHL said in the affidavit.
The DCHL in its affidavit said Land Interactive Media will have Rs 250 crore as capital though allotment of 18.74 crore equity shares. The shares are proposed to be allotted at a price of Rs 13.34 including a premium of Rs 12.34 per share. The shares will be held entirely by the promoters.
DCHL shares today closed at Rs 3.17 on the BSE.
"To unlock the value of the assets and realise the true potential of the print business of DCHL, the print business is proposed to be demerged into a separate company to bring in distinct focus," the DCHL affidavit said.
"The entire shares in the resulting company (Land Interactive Media) including the equity shares to be allotted pursuant to the scheme as consideration for demerger and on conversion of convertible debentures, will be considered for listing on the national Stock Exchange and/or Bombay Stock Exchange subject to...," DCHL said.
DCHL also informed the court that there are no common directors in DCHL and the demerged entity.
DCHL had recently said the Board of Directors of the Company at its meeting held on February 22, 2013, has considered and approved the Draft Scheme of Arrangement with Creditors/Lenders including the demerger of undertaking of the company as per the provisions of the Section 391-394 of Companies Act, 1956.
The firm will retain 3.75 MHz of spectrum in Delhi and Mumbai for which it will pay a one-time fee to the government