Deccan Chronicle: CDR deferred, Yes Bank complicates matters

Lenders to Deccan Chronicle Holdings once again put off plans to recast the company's loans via the debt restructuring route as they are awaiting an audit report from Canara Bank of possible fraud, which would at least take a month to complete.

"If the audit establishes the fraud in the company, then it won't be considered for the CDR," a bank official was quoted as saying by Business Standard. However, any delay in the decision on restructuring could put pressure on the financials and bring down the valuation of the company.

[caption id="attachment_468842" align="alignleft" width="380"] AFP[/caption]

This is the second time banks postponed the decision. Earlier, they had discussed the case on 12 September.

Shares of Deccan Chronicle are trading1.74 percent lower at Rs 10.15 on the BSE. The stock has lost 15 percent in the last one month and 68 percent in the last three months after the company plunged into a financial crisis.

More from Business

Litigation on sale of the media company's Indian Premier League cricket team Deccan Chargers, lack of clarity on total debt and claims from non-banking institutions like Tata Capital, IFCI and Religare Finvest have complicated the process of recovery of dues even further.

Deccan Chronicle Holdings has a total exposure of Rs 5,000 crore across 14 lenders including ICICI Bank , Canara Bank and Axis Bank . Bankers have asked the company to submit additional data on its borrowings and assets that have been collateralized, an Economic Times report said today.

Meanwhile, YES Bank has thrown Deccan Chargers' defence against the termination by the BCCI into a tailspin. In a fresh submission in the Bombay High Court, YES Bank asserted that its support to the Deccan Chargers was not unconditional as argued by Deccan Chronicle in court. It slapped three conditions on the payment that it made as a lender to the cricket team. One, that the BCCI will have to withdraw its termination notice; two, that the amount of Rs 41 crore that is due to the Deccan Chargers by the BCCI will have to be paid immediately and three, that this amount will have to be deposited in the YES Bank account of Deccan Chronicle.

It stated that if these conditions were not met, it will have to withdraw the demand drafts which would effectively mean that the players of Deccan Chargers will remain unpaid.

Deccan Chronicle Holdings has requested time to reply to Yes Bank's plea. The matter will come up for hearing on Wednesday.