Cash-strapped Deccan Chargers reject Rs900 crore bid

“I can’t bite more than I can chew,” said Potluri Vara Prasad, the man who dared to bid for the cash-strapped Deccan Chargers IPL team.

The businessman from Andhra Pradesh placed a bid of Rs900 crore through his company PVP Ventures but the ‘reasonably’ sound offer was rejected by the Hyderabad team management.
“Venkattram Reddy (team owner) summarily spurned it,” Prasad told DNA. He, however, vowed to continue his efforts to acquire an

IPL team for Andhra Pradesh.
There was only one bid for the team put on sale. With the attempt falling flat, the fate of the Deccan Chargers is uncertain. The Chargers need to honour their IPL commitments, which include clearing salaries for the players and releasing the team from the mortgage, in the next 48 hours failing which they stand the danger of being scrapped. A decision on the team will be taken by the working committee of the Board of Control for Cricket in India (BCCI) in Chennai on Saturday.

Neither Prasad nor Reddy, and not even the BCCI, was willing to discuss the reasons for the bid’s rejection, but it is understood that the terms of payments of were not acceptable to the bankers, 15 of whom were present at the meeting held at Park Sheraton Hotel in Chennai on Thursday.

Of the Rs900 crore, PVP Ventures offered to pay Rs90 crore a year for the next five years and the remaining Rs450 crore through debentures after five years in 2022. However, the roadblock, it appears, was not the staggered payment structure but the condition for a bank guarantee.

The banks are said to have demanded a guarantee for Rs450 crore upfront, and it wasn’t acceptable to the bidder. “It is step-motherly treatment. No such demand was made for any of the previous teams. Why should I produce a guarantee?” asked an agitated Prasad.

Earlier, PVP Ventures was cleared by the BCCI with its president N Srinivasan declaring that the party was acceptable to the board. “We found that the party was acceptable to us. After that, it was between Deccan Chargers and the bidder; there the BCCI was not involved. But they informed us that the price and terms were not suitable, so they didn’t accept it,” N Srinivasan said.

The team, bought for $107 million in 2007, was put on sale after the Chargers management told the BCCI that it cannot wriggle out of the financial mess it has found itself in and sought the cricket body’s help in selling the team. With the bid for sale aborted, the Chargers are back to square one.