Deccan rejects price bid for Deccan Chargers

BCCI did not reveal the bidder's name or the price offered

Deccan Chronicle Holdings Ltd (DHCL), owner of Deccan Chargers, the Hyderabad team of Indian Premier League (IPL), today rejected the price offered from a potential bidder. It was stated the price offered was not acceptable.

BCCI did not revel the bidder's name, but sources it is Andhra Pradesh-based PVP.

N Srinivasan, president, BCCI, said that "only one bid was received and BCCI found he was eligible. However, DHCL rejected saying price was not acceptable".

He refused to comment on the bidder's name. Sources said, PVP Ventures was the sole bidder. It mat be noted, that they are under the CBI scanner for their association with Jagan Mohan Reddy.

Potluri Vara Prasad is an entrepreneur, film financier, producer, philanthropist and educationalist. He hails from Vijayawada, Andhra Pradesh. He is the chairman and managing director of PVP ventures, a company into real estate and media and entertainment business.

PVP is the Promoter and holds substantial investments in Picturehouse Media Limited, an organisation at the forefront of providing capital for the Indian entertainment industry.

He was the producer of recent bilingual hit film Naan Ee and also a producer of Visvaroopam, a bilingual film written, directed and co-produced by actor Kamal Haasan.

Asked what is the next step would be, Srinivasan said, "it is between them, and the franchise will continue".

The new owner was expected to shoulder a part of financial liability left behind by DHCL.

On September 15, 2012 their is a special working committee meeting of BCCI in Chennai.

According to reports, the group had mortgaged assets of the team to banks to raise funds even though according to the IPL norms the teams and their assets could not be mortgaged. Bankers argued the current rules did not prevent them from having a right on revenues earned by Deccan Chargers through sponsorship and ticket sales.

Deccan Chargers issued a tender notice on September 6, which suggests "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."

DCHL has also reportedly failed to clear payment for the players.It is to be noted that the group borrowed around Rs 3,200 crore from 28 lenders.

According to a report quoting the department of financial services, part of Union Finance Ministry, the debt of the company is around Rs 5,000 crore. Only two private sector banks and one financial services firm had the right on Deccan Chargers’ revenues as collateral against their loans, added reports.

There were also a few legal disputes occured in the previous days related to the auction. At least one lender has already went to court with a winding up petition against DCHL, while Tata Capital Financial Services, to whom the company has to pay around Rs 101 crore, received a permission from the Bombay High Court to attend the auction process today.

The court, in a petition by Tata Capital seeking protection of its interest while the auction amount is disbursed, mandated that the sale proceed from the auction has to be deposited with ICICI Bank, which should not be disbursed without prior permission of the Court. According to the order, five per cent of the auction money has to be paid to BCCI. The Court has also appointed a Court officer to supervise the auction.Another petition filed by the team's earlier chief executive Tim Wright to stay the auction process since it owes him dues, was rejected by the Andhra Pradesh High Court.DCHL has been looking to sell their stake for the past two years and has recently appointed Religare Capital to structure a deal, but did not find a suitable buyer.According to agency reports DCHL acquired the franchise for $107 million in 2008.

The team, which was in the last position of the eight teams in the IPL 2008, made a turnaround as the champions of IPL 2009, winning nine of the 16 matches it played. Losing out slowly in the game, it came to the eighth position of the total nine teams in IPL in 2012.

According to sources, the bid amount was Rs 900 crore. Deccan Chronicle and the bankers wanted bank guarantee, which was not part of the original bid and this was not acceptable to PVP, which walked away. The renegotiation is upto the BCCI and the franchisee, said sources.