Hyderabad-based publisher Deccan Chronicle Holdings has put a reserve price valuation of R1,500 crore, nearly three times its original acquisition cost, to sell its Indian Premier League cricket team Deccan Chargers (DCL), led by Sri Lankan captain Kumar Sangakkara, a person with direct knowledge of the development said.
The Reddys, who own 80% of DCL, will use the money to repay lenders, the person said.
The firm purchased the team in 2008 for $107 million (roughly R590 crore) jointly with Group M, the media arm of the world's largest advertising firm WPP, which owns a 20% stake. Investment bank Religare Capital Markets and consultant KPMG India are advisors to the sale.
Deccan Chronicle, which publishes Deccan Chronicle and Financial Chronicle dailies from southern India, had defaulted payments to its lenders Life Insurance Corporation of India, the country's largest insurer by premium, and IFCI, United India Insurance and non-banking financial company RoyalSundaram, among others.
The company owns close to R1,200 crore to its lenders.
Deccan Chronicle chairman T Venkattram Reddy, also the owner of Deccan Chargers, did not respond to calls.
In January 2011, Deccan Chronicle merged its wholly-owned subsidiary Deccan Chargers Sporting Ventures, which owned stake in the cricket team, with itself.
In June this year, there were news reports that Australia-based NRI Vikas Rambal could be one of the potential buyers. Rambal, who is sponsoring Champions League Twenty20 team Waca Warriors, is the chairman of Australia’s North West Chemicals and Fertilizers. Power to ports developer Adani group and Malaysian state oil refiner Petronas were other names reported to be interest in Deccan Chargers, which won the IPL cup in 2009 led by former Australian wicket keeper Adam Gilchrist.
“After 5 seasons, the IPL has matured as a league and potential investors are now looking at this as a long term business which can be successfully monetised,” says Siddhartha Nigam, partner (M&A) at Grant Thornton, a consultancy. “For franchises, stake sales are lucrative because they have grown the business to a certain level and can now exit.”
On Wednesday, Deccan Chargers' former Chief executive Tim Wright, who had sued the franchise for breach of employment contract, won the case in the Royal Courts of Justice, London. Judge Seymour ordered Deccan Chargers and Deccan Chronicle Holdings to pay Wright 10,533,478 pounds due under his contract.
According to a report by UK-based Brand Finance, Deccan Chargers was ranked sixth among eight IPL franchises, with a brand value of $38.76 million in 2011, up from $34.44 million in 2010.
“The IPL juggernaut has hit a speed breaker with an erosion of $460 million of its long-term value. Its sustainability will largely depend on infusing governance policies to align all the stakeholders towards win–win relationships and thereby preserving the value..
source:http://www.financialexpress.com/news/deccan-chargers-put-on-the-block/976387/3
The Reddys, who own 80% of DCL, will use the money to repay lenders, the person said.
The firm purchased the team in 2008 for $107 million (roughly R590 crore) jointly with Group M, the media arm of the world's largest advertising firm WPP, which owns a 20% stake. Investment bank Religare Capital Markets and consultant KPMG India are advisors to the sale.
Deccan Chronicle, which publishes Deccan Chronicle and Financial Chronicle dailies from southern India, had defaulted payments to its lenders Life Insurance Corporation of India, the country's largest insurer by premium, and IFCI, United India Insurance and non-banking financial company RoyalSundaram, among others.
The company owns close to R1,200 crore to its lenders.
Deccan Chronicle chairman T Venkattram Reddy, also the owner of Deccan Chargers, did not respond to calls.
In January 2011, Deccan Chronicle merged its wholly-owned subsidiary Deccan Chargers Sporting Ventures, which owned stake in the cricket team, with itself.
In June this year, there were news reports that Australia-based NRI Vikas Rambal could be one of the potential buyers. Rambal, who is sponsoring Champions League Twenty20 team Waca Warriors, is the chairman of Australia’s North West Chemicals and Fertilizers. Power to ports developer Adani group and Malaysian state oil refiner Petronas were other names reported to be interest in Deccan Chargers, which won the IPL cup in 2009 led by former Australian wicket keeper Adam Gilchrist.
“After 5 seasons, the IPL has matured as a league and potential investors are now looking at this as a long term business which can be successfully monetised,” says Siddhartha Nigam, partner (M&A) at Grant Thornton, a consultancy. “For franchises, stake sales are lucrative because they have grown the business to a certain level and can now exit.”
On Wednesday, Deccan Chargers' former Chief executive Tim Wright, who had sued the franchise for breach of employment contract, won the case in the Royal Courts of Justice, London. Judge Seymour ordered Deccan Chargers and Deccan Chronicle Holdings to pay Wright 10,533,478 pounds due under his contract.
According to a report by UK-based Brand Finance, Deccan Chargers was ranked sixth among eight IPL franchises, with a brand value of $38.76 million in 2011, up from $34.44 million in 2010.
“The IPL juggernaut has hit a speed breaker with an erosion of $460 million of its long-term value. Its sustainability will largely depend on infusing governance policies to align all the stakeholders towards win–win relationships and thereby preserving the value..
source:http://www.financialexpress.com/news/deccan-chargers-put-on-the-block/976387/3
