Hyderabad : Ailing media house Deccan Chronicle Holdings is seeing light in the form a revival plan from Manoj Mohanka, former chairman of Network 18 Media and Investments and a finance and management expert, who is preparing to acquire DCHL through a deal that is being worked out with the stakeholders and lenders.
The former president of Calcutta Chambers of Commerce has accepted a proposal from DCHL’s single largest stakeholder, Srei Infrastructure Finance, to infuse fresh capital into the beleaguered media house.
Speaking on the development Mohanka said, “There is huge potential in turning the publication around, but it cannot be done with the existing debt even if some miracle takes place. If all the stakeholders buy into the proposed scheme of compromise, then there is certainly huge opportunity for a turnaround.”
The move comes even as ICICI Bank, a large creditor of DCHL, is contesting the stake holding of Srei Infra Finance, which was allotted 6.6 crore shares of Rs 2 each, constituting 24% stake, by DCHL management in January 2015.
ICICI Bank, which had in February 2015 announced the acquisition of 24.9% stake in DCHL through invocation of pledged shares, argues that the allotment amounted to breach of an interim stay issued by the courts.
Srei Infra has obtained approval of the High Court of Judicature at Hyderabad to convene a meeting of DCHL stakeholders for a scheme of compromise and arrangement.
The court-convened meeting, to be held on March 19, will consider the proposals on reorganisation of DCHL’s share capital, writing off 75% of accumulated losses and converting 25% of losses (Rs 996.87 crore) into equity and debt instruments.
As of September end 2012, DCHL has accumulated losses of Rs 513 crore and the meeting on 19th March proposes to to write offRs 52.25 crore of losses against the paid-up capital of DCHL.
The media house currently has paidup equity of Rs 55 crore. Manoj Mohanka proposes to infuse Rs 30 crore as equity and unsecured loans to take charge of the day-to-day affairs of the firm.
Hemant Kanoria, chairman of Srei Infra group, said, “All the legal efforts… were aimed at reviving the company and realising our monies.”
DCHL chairman Venkattram Reddy is yet to respond on the new developments.