Deccan Chronicle Holdings has rejected the lone bid, from Potluri Vara Prasad (PVP) Ventures, for its IPL franchise at an auction here on Thursday noon.
The Deccan Chargers owners, beset by financial problems, may have time till 5 p.m. on Saturday — when BCCI will begin its working committee meeting here to take a final call on the franchise — to try and reach a settlement with PVP. The PVP Ventures is into movie production and financing.
According to sources, PVP offered to pay Rs. 450 crore in cash (Rs. 90 crore every year) for the first five years and then give an additional Rs. 450 crore in the form of debentures over the next five. The total offer of Rs. 900 crore did not find favour with the seller.
During the auction, Deccan Chronicle Holdings was guided by banks that had lent big money to the company. In fact, the decision was as much that of the banks, that included ICICI, Canara, IOB, IDBI, Yes and Axis, as of the franchise.
The franchise was bought for $107 million in 2008 and the banks, attempting to recover money, might have expected a higher bid. The Pune franchise was won by Sahara in 2010 for $370 million.
But then, the financial hardships faced by Deccan Chronicle Holdings might have deterred prospective buyers. Videocon, widely expected to feature in the auction, was absent from the proceedings.
BCCI chief N. Srinivasan, who was present at the auction, said “One bidder was eligible from the BCCI point of view. But after opening the price bid, Deccan Chronicle Holdings decided that the price and terms of payment were not acceptable so they rejected the bid.”
He said the BCCI was not involved in the auction process. “The tender was issued by them (Deccan Chronicle Holdings). We assisted them in that and looked at the eligibility criteria and after that it was between Deccan Chargers and the bidder. The BCCI was not involved at this stage.”
He hinted that a solution might yet be found. “That is up to them. They (Chargers) are still in charge.”
But then, the BCCI terminated the Kochi Tuskers franchise in 2011 for breaching its terms of agreement. This time around, there are issues regarding Deccan Chargers’ payment to its cricketers.
If the BCCI strikes out the Chargers from the IPL — it will then become an eight-team league — the banks stand to gain nothing. The BCCI Working Committee meeting on Saturday will be a significant one.