Srei to approach other lenders for Deccan Chronicle debt rejig

With an outstanding debt of close to Rs 4,000 cr, reviving Deccan Chronicle could be an uphill task

A day after Kolkata-based Srei Infrastructure Finance (SIFL) called an extra-ordinary general meeting (EGM) of Deccan Chronicle Holdings (DCHL) in Hyderabad to appoint five directors in the company, Sunil Kanoria, vice-chairman of SIFL said, once the National Company Law Tribunal (NCLT) approved the appointments, it would vet options to revive the company and approach other lenders for debt restructuring. 

“Once we get into the company, if the NCLT allows, we would prepare a statement assessing the financial situation of the company. Then we will approach all the lenders, and see if we can do a restructuring of the debt; how much it can pay; how much it cannot and how much write offs the lenders can do,” said Kanoria, adding, that their first objective was to protect the investments and see how they could recover the money.

However, with an outstanding debt of close to Rs 4,000 crore, reviving Deccan Chronicle could be an uphill task. 

 “The debt liability is estimated to be around Rs 4,000 crore. It is understood that the company does not have access to normal banking/lending channels to meet its operational capital requirements,” according to the EGM notice. 

In 2015, Srei converted a part of its debt in DCHL into equity amounting to around 24 per cent, thus emerging as the largest shareholder in the company.

On Monday’s EGM, Srei got the shareholders’ approval to appoint five directors, including, Manoj Mohanka former chairman of Network18 Media Investments and TV18 Broadcast Limited and Sabina Inderjit, former journalist and Press Council member. 

Srei also proposed names of Dipen Chatterjee, Shamik Roy, and Prashant Mustii. Roy was the president and group CFO of Punj Lloyd while Mustii comes from a financial services background. Chatterjee is the Principal Associate of law firm Khaitan and Co.

“We have had one success after so many years to get an EGM done and get shareholders’ approval. Our objective is to revive the company, so that we can recover our dues,” said Kanoria.

Srei had asserted its right to hold the EGM under Section 100(4) of the Companies Act, 2013, stating that the DCHL board had not been able to convene an EGM even though it had sent a valid requisition dated December 20, 2016, within the statutorily prescribed time.

Notably, this is Srei’s second attempt to take control over DCHL. 

In 2016 Srei mooted the idea of lenders’ meeting whereby it had suggested that each lender give up claim on 75 per cent of the debt while and take equity in the revamped company in proportion to the remaining 25 per cent claim. 

The meeting did not take place due to an interim stay granted by Hyderabad High Court.