Srei Infrastructure Finance Ltd has acquired majority control of beleaguered media company Deccan Chronicle Holdings Ltd on Monday following issue of 6.6 crores of fresh shares to the financier as part of a sustained effort by the Kanorias to recover the money lent to the Reddy family that runs newspapers like Deccan Chronicle and Financial Chronicle.
Following a recent order of the Debt Recovery Tribunal on December 24, DCHL has now issued 6.60 crore shares of Rs 2 each at a premium of Rs 1.18 per share to Srei as the lender opted for the conversion option.
With this, Srei will have ownership of 24% of the expanded equity base of 27.5 crore shares followed by the Reddys, whose holdings would fall from 15.39% as on September-end to 11.69% on the expanded equity base.
Despite becoming the largest shareholders, Srei doesn't have any plans to control or even interfere in the various businesses of DCHL.
"Our only concern is the recovery of our dues. The stake we have now is only because of the conversion of loans extended to them. We have no interest in running the business as we have no idea about media businesses nor we have any inclination to venture into that," Hemant Kanoria, chairman and managing director of Srei Infrastructure Finance told dna post the announcement of the transaction.
Srei owed about Rs 220 crore from Deccan and it follows similar efforts by others among the 28 key lenders to DCHL who have already proceeded against it under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act to recover their dues.
Srei is also simultaneously taking steps to recover money from the properties spread across Hyderabad and Chennai which were mortgaged against the loan.
"We are trying to monetise some of the properties and our final realisation would depend upon what we get from those," Kanoria said.
Srei had moved the DRT in 2013 for recovery of its loans and subsequently in early 2014 sent a notice to DCHL demanding conversion of its loans following which a committee comprising three board members was formed by DCHL.
At around same time ICICI Bank acquired some 1.8 crore shares or about 9.8% stake then by invoking the pledge of these shares.
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