India Cements' to float new subsidiary for CSK

The new arm, Chennai Super Kings Cricket Ltd, will be set up on January 1, 2015

Chennai Super Kings (CSK), the Indian Premier League (IPL) franchisee of India Cements, will be floated as a new wholly-owned subsidiary, effective January 1 next year. The new company will be named Chennai Super Kings Cricket Ltd.

On September 26, the company’s directors met and approved a proposal in this regard. The company stated the de-merger would provide the team leverage to grow.

The development comes at a time when the Supreme Court has said CSK should be disqualified without any further probe by the Mudgal committee, set up to probe allegations of fixing and betting during the 2013 edition of the IPL. “Who is controlling Chennai Super Kings?” the apex court had asked, directing India Cements chief

N Srinivasan to declare before it all shareholding patterns of the company, as well as its sports franchisee.

However, the company said CSK shouldn’t be disenfranchised from the IPL because of violation of clause 11.3 of the IPL franchise rules, as that provision only dealt with acts of the franchisee or a group company or the owner, who controlled the franchisee. It also said allegations pertaining to a particular match had been proven false, as there were no findings in this regard.

India Cements had bagged the CSK franchise for about $91 million, payable through 10 years to the Board of Control for Cricket in India (BCCI) in equal instalments from 2008, when it had won the bid for the franchise.

For 2013-14, CSK clocked revenue of Rs 166 crore. Its revenue comes by way of a share from BCCI-IPL, from the sale of media rights and sponsorship income. Besides, it also garners revenue through stadium gate collections, team sponsors, uniform sponsors, etc. CSK’s sponsors include Aircel, Gulf Oil and UST Global.