Lenders with exposure to Deccan Chronicle Holdings Ltd (DCHL) on Tuesday postponed a decision on admitting the cash-strapped company’s proposal to recast its loans under the corporate debt restructuring (CDR) route, saying they would wait for an audit report by Canara Bank.
DCHL is the parent company of the Deccan Chronicle newspaper and Indian Premier League (IPL) cricket team Deccan Chargers.
“The decision regarding loan recast was put on hold,” said a senior bank executive after on Tuesday’s CDR meeting. This is the second time banks postponed the decision. Earlier, they had discussed the case on September 12.
| CHRONICLE OF DEBT RESTRUCTURING |
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Canara Bank is conducting the forensic audit for DCHL. A top Canara Bank official said it would take at least one month to complete the work (on a forensic audit report).
According to the terms and conditions that govern the CDR process, consent of at least three-fourth of the lenders is required to draw a debt restructuring programme for a particular company. Total debt to be admitted by the CDR cell is about Rs 2,300 crore, while the banks’ total exposure to DCHL is Rs 5,000 crore.
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Another public sector bank associated with CDR for the company said most lenders would convey their view only after studying the forensic report. “If the audit establishes the fraud in the company, then it won’t be considered for the CDR,” an official with the bank said.
Top lenders whose exposure to DCHL is considered by CDR cell are ICICI Bank, Axis Bank, Canara Bank, IDBI Bank and Andhra Bank.