CDR move divides Deccan’s bankers

Bankers with an estimated exposure of about Rs5,000 crore to the beleaguered Deccan Chronicle Holdings Ltd (DCHL), are a divided lot, thanks to the company’s decision last Friday to go in for corporate debt restructuring (CDR).

While a group of bankers is said to be in favour of CDR, another group is said to be pressing for the outcome of the forensic probe before offering any package.

“There are different views at this point. First of all, a recent meeting of the creditors has come out with the figure of Rs3,270 crore as the total debt of the company. However, D K Mittal, financial services secretary, on Tuesday quantified it as Rs5,000 crore. We still don’t know if more such claims would come up. So, there is no point in granting a CDR package unless the total liabilities are brought to the table,” said a source who has been tracking the Deccan saga.

The pro-CDR group of bankers is said to be keen on delinking debt cast from the forensic probe. “There is also a view that irrespective of the outcome of the probe, the liability of the company would remain; and as a borrower, the company has to repay till the banks are forced to recover. So, the view is that there is no link between the probe and CDR,” said another source.

However, it is said there is a general consensus among bankers that the accounting systems in the company should be scrutinised first and found fine before offering a fresh lease on life by way of a CDR package.

According to sources, the bankers were keen that IFCI withdraw its petition filed in the Andhra Pradesh high court so that they could put in a concerted effort to either revive the financial health of DCHL or proceed against it in case of further slippage. However, IFCI is said to have disagreed with the bankers and refused to withdraw the petition.

Meanwhile, in a respite of sorts for DCHL, the Andhra Pradesh high court on Wednesday dismissed a petition filed by former CEO of Deccan Chargers Timothy Wright seeking the court’s intervention in the proposed auction of the Hyderabad-based IPL cricket team.

After filing a petition in the lower court for execution of an order passed by a London court, which had granted him about Rs95 crore in compensation in a case against the company for breach of employment contract, Wright had approached the high court. While the lower court has posted the case to October 3, 2012 for further hearing, Wright has invoked the urgency clause in view of the team’s auction.

While dismissing the petition, the high court has advised Wright to go back to the lower court and has also advised the lower court to expedite the procedure in view of the auction.