It’s the first verbal expression of interest in buying the team, which will be auctioned in Chennai on 13 September, also the last date for submitting the bids, according to a tender notice that appeared in The Hindu and The Times of India (TOI) on Thursday. The successful bidder may need to enter into a new franchise agreement with the Board of Control for Cricket in India (BCCI), the notice said.
The team will continue to be based in Hyderabad and will compete in the IPL and has the opportunity to compete in the Champions League T20 from next year (2013).
Deccan Chronicle Holdings, which publishes the newspapers Deccan Chronicle, Financial Chronicle, Asian Age and Andhra Bhoomi, had bid successfully for the Deccan Chargers in January 2008 for $107 million (around Rs.599 crore today), riding on the back of a successful December 2004 initial public offering (IPO). It acquired star cricketers such as Adam Gilchrist, Herschelle Gibbs, Andrew Symonds, Chaminda Vaas and Shahid Afridi. The team also won the second IPL season in South Africa in 2009 under the captaincy of Australian cricketer Gilchrist.
In the most recent IPL season, the team finished at the bottom of the table, winning only four of the 15 games it played. For the 2012 edition of the game, Deccan Chargers has just about managed to rope in sponsors for the team.
Deccan Chargers was initially a subsidiary of Deccan Chronicle Holdings, but merged with the parent company in January last year. Deccan Chronicle Holdings has found itself in a financial mess after it emerged that the promoters availed loans to the tune of Rs.1,500 crore from various banks, mortgaging several of its assets, including its cricket team.
The promoters face a case of cheating filed by the company’s registrar Karvy Computershare Pvt. Ltd. Some of its lender banks have approached the debt recovery tribunal and the high courts of Andhra Pradesh and Bombay to recover their dues.
The management has not been paying team salaries. Former chief executive Timothy Wright sued the management successfully in a London court, which ordered Deccan Chronicle Holdings to pay him £10.55 million (around Rs.94 crore today) for breach of contract. Wright has filed an execution petition in the city civil court in Secunderabad seeking enforcement of the London court judgement, according to a TOI report on Thursday.
T. Venkattram Reddy has blamed the present crisis on a liquidity crisis and declining advertisement revenue. Reddy said he needs Rs.400-500 crore to tide over the crisis in an interview to The Economic Times.
Deccan Chronicle Holdings said the winning bidder will acquire the team on an “as is where is” basis. The bids will open at 10am on Friday and potential bidders will have to fulfil the eligibility criteria of BCCI besides “other requirements specified in the invitation to tender”.
The bidders will have time to seek clarifications until 5pm on Monday.
It is likely that the BCCI may step in and seek a new buyer for the cricket team, if Deccan Chronicle Holdings fails to find one, according to reports. The board, which met in New Delhi over the issue on Tuesday, will meet again in Chennai on 15 September to find a solution to the crisis.
Shares of Deccan Chronicle Holdings fell 4.97% to Rs.12.23 on BSE at the close. The benchmark Sensex gained 0.19%.HT Media Ltd, publishers of Mint and Hindustan Times, competes with Deccan Chronicle Holdings in some markets.
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