Lenders fight over Deccan Chronicle publishing titles, delay recovery of more than Rs 5,000 crore
Lenders to the troubled Deccan Chronicle Holdings are unable to recover dues of more than Rs 5,000 crore due to a dispute over the company’s publishing titles.
The dispute ensured that IDBI Bank could not find any taker when it recently invited bids for newspaper titles such as Deccan Chronicle, Asian Age, Andhra Bhoomi and Financial Chronicle.
“There is opposition to IDBI Bank’s move to auction the trademarks. So the auction has failed,” said a banker familiar with the matter, on the condition of anonymity.
Deccan Chronicle, which published an eponymous newspaper from Hyderabad and owned a cricket club in the Indian Premier League, has become the second biggest defaulter in the latest credit crunch, after Kingfisher Airlines went down owing lenders more than Rs 7,000 crore
The Hyderabad-based company declared itself sick last month and checked into the Board for Industrial and Financial Reconstruction.
Deccan Chronicle and IDBI Bank declined to comment on the matter, while Kotak Mahindra Bank did not respond to an e-mail query. An executive with IDBI Bank, however, said on the condition of anonymity, “We have a right to seek request for proposals, which we have received.
Because of the claims and counter-claims by various banks, the sale process has been delayed.” Analysts say, the bickering between the lenders could erode the value of the group’s brands even as, unlike in the developed world, print media has a potential to grow in the country. “Compared to the global markets, the print business in India is doing well,” said Smita Jha, leader - media and entertainment, PwC India.
“Growth is coming from the regional markets. With growing income levels, readership in regional market is growing.” Such cases have forced the Reserve Bank of India to tighten the norms for loan disbursals and recovery.
The regulator has directed the lenders to set up a central repository of large credits and share with the banks so that the borrowers’ actual debt levels are known before sanctioning a fresh loan.