MUMBAI: Deccan Chronicle Holdings Limited (DCHL), having a debt weight of Rs 32 billion, can heave a sigh of relief as it found an interested party in Videocon Industries soon after it issued a tender notice inviting prospective buyers to bid for its IPL team.

The sale of the team at the right price holds the key to DCHL?s rescue plan as it desperately seeks investors to protect its core media business from sinking. The company is believed to have borrowed from 28 lenders including Yes Bank, and has mortgaged its other assets including its printing presses.

However, it?s amptly clear by now that DCHL will not get the kind of valuation that it was earlier looking for. The company, which publishes a clutch of newspapers including Deccan Chronicle and Financial Chronicle, was seeking Rs 15 billion from the sale of Deccan Chargers, the Hyderabad IPL team.

After gauging market sentiment, the company has climbed down from its demand and would be able to find a buyer willing to pay in the range of Rs 6.5-8 billion. Many believe Rs 6.5-7 billion would be an attractive valuation for the Hyderabad team.

Venugopal Dhoot, the CMD of conglomerate Videocon Industries, told Indiantelevision.com that a price tag in that range was "reasonable".

"We are interested in buying the franchise. Our bid could be in the range of Rs 7 billion," he added.

However, Videocon is not the only interested party. Some of the names doing the rounds include that of Ahmedabad-based Adani Group, Anil Ambani-promoted ADA Group and Chennai-based media house Sun Group(not listed entity).

Indiantelevision.com could not independently confirm whether Adani, Reliance ADAG and Sun are actually interested in Deccan Chargers. Gautam Adani, chairman of Adani Group, and Sun Group promoter Kalanithi Maran, could not be reached. Earlier, DCHL had denied a media report which had stated that the company was close to striking a deal with Sun Group.

Incidentally, Videocon, Adani and Reliance had at some point expressed interest in owning an IPL team.

DCHL had early Thursday issued a tender inviting bids to purchase the Hyderbad IPL team under the aegis of BCCI.

As per the tender notice, bidders would be required to enter into a new franchise agreement with BCCI. The purchase consideration would be paid into a bank account as decided by the lending banks, with 5 per cent payable directly to the BCCI.

The winning bidder will acquire from Deccan Chronicle Holdings on an "as is where is" basis which means that the new buyer will have to use the name Deccan Chargers and will have to clear the liabilities of the current owner.

The valuation climbdown

Kings XI Punjab co-owner Mohit Burman opines that anyone wanting to enter the IPL should pay a maximum of $200 million for a franchise as he believes that anything above will make the venture unsustainable.

"I am sure that the owners of the Deccan Chargers would love to get the price that the BCCI got when Sahara bought a franchise ($374 million for the Pune franchise). But had the business model been sustainable at such high price levels, then Kochi would not have folded," avers Burman.

Part of the family that owns Dabur, Burman adds: "The initial franchise buyers have managed to make profits. So a price of a price of around $125 million (Rs 6.5 billion) is reasonable. But to make profits after paying over $200 million could be difficult. Of course you could have a scene where someone enters the IPL for reasons other than wanting to make a profit. Then the price could be anything."

In 2008, DCHL paid $107 million for Deccan Chargers, making it the third costliest team among the first lot of franchise buyers. Billionaire Mukesh Ambani topped with $111.9 million for the Mumbai franchise, followed by Vijay Mallya?s $111.6 million for the Bangalore team.

Agrees Brand Finance India managing director M Unnikrishnan, "I think a value of Rs 6.5 billion is fair enough for a team like Deccan

 Chargers considering the fact that it falls on all three key parameters: engaging fans and monetising that fan base; lack of consistent performance on the field; and governance process."

The climbdown in Deccan Chargers valuation doesn?t surprise Unnikrishnan since that has been the trend with the IPL mother brand, which has seen its brand value plummet from a high of $4.13 billion in 2010 to $2.92 billion this year.

"The fate of the franchises and the mother brand (IPL) are interlinked. The brand valuation of IPL has been declining and it has reached 2009 levels when the valuation was at $2 billion," he adds.

Unnikrishnan, though, feels there is a hidden value in Deccan Chargers that any prospective buyer would like to exploit in the long run. "An investor has the scope to get its (Deccan Chargers) true value in future by fixing the weak areas," he says.

MUMBAI: Conglomerate Videocon Industries will bid for the purchase of the IPL franchise Deccan Chargers, the company?s chairman and managing director Venugopal Dhoot told Indiantelevision.com.

"We are interested in buying the franchise," he added.

The financially stressed Deccan Chronicle Holdings Ltd, the parent company which owns Deccan Chargers, issued a tender today inviting bids to purchase the Hyderbad IPL team under the aegis of BCCI.

Is Rs 6.5 billion a realistic price range? "Yes, this seems to be a reasonable value," Dhoot said.

As per the tender notice, bidders will be required to enter into a new franchise agreement with BCCI.

The purchase consideration will be paid into a bank account as decided by the lending banks, with 5 per cent payable directly to the BCCI.

The bid amount will have to be paid into a bank account of banks as decided by the lending banks with 5 per cent payable directly to the BCCI.

The winning bidder will acquire from Deccan Chronicle Holdings on an "as is where is" basis the right to own and operate the IPL team currently known as Deccan Chargers which is and will continue to be based in Hyderabad, the tender notice read.

The invitation to tender document will be available from 7 September at the BCCI office in Mumbai upon payment of Rs 0.5 million by demand draft of pay order favouring DCHL.

Bids have to be submitted in person at 12 noon on 13 September at the Greenways Hall, ITC Hotel Park Sheraton and Towers, Chennai. The winning bids will be announced on the same day.

MUMBAI: The Board of Control for Cricket in India (BCCI) is planning to scrap the rotational policy of appointing president.

The BCCI has called for a Special General Meeting in Chennai on 15 September to make amendments to the clause that will allow candidates from any of the five zones to stand for future presidential elections.

N Srinivasan, the outgoing president of the board, is from South Zone. As per the current rotational policy, it is East Zone?s turn to send a president when Srinivasan completes his term in 2014.

The changes, it is believed, is being brought to pave the way for BJP leader and Delhi District Cricket Association president Arun Jaitley ascension to the top of BCCI hierarchy. Without amendment to rotational policy clause, Jaitley would have to wait till 2014, when the North Zone?s turn comes to appoint a president.

"As per the existing rule, a president has to be from a particular zone whose turn it is by rotation to take over the presidentship. The change sought to be made at the SGM is that the future presidential candidate may belong to any of the five zones, but only needs to be proposed and seconded by the zone whose turn it is," newswire PTI quotes BCCI sources as saying.

The move will strengthen the control of policians in the world?s richest cricket board which has been grappling with charges of financial misconduct in the Indian Premier League (IPL). Earlier, Congress leader and Minister of State for Parliamentary Affairs Rajeev Shukla was appointed as IPL chairman.

MUMBAI: Worried about the implications of the financial mess at Deccan Chronicle Holdings and its bearings on the IPL franchise Deccan Chargers, the IPL Governing Council (GC) has given the franchise owners 14 days to sort out the matter.

The IPL GC had called for a meeting in New Delhi to discuss the issue after learning that the owners who run Deccan Chronicle newspaper have mortgaged the franchise to some banks in order to tide over the liquidity crunch that has hit the company.

According to IPL rules, team owners are prohibited from mortgaging their teams as it has the potential to put it in a jeopardy which will also have an impact on the IPL.

"The governing council today heard both sides--the franchise owners as well as representatives of the banks. We have given Deccan Chargers, 14 days time to sort out the mess and get back to us," an IPL GC member said after the meeting.

"If the issues are not sorted out within the next fortnight, we will decide on further course of action," he added.

The owners of Deccan Chargers are planning to sell the IPL team to raise cash to fund their debt. Religare Capital Markets has been mandated to find a new buyer for the team.

The gravity of the situation can be gauged from the fact that the DCHL promoters have pledged their entire holding to ICICI Bank, Future Capital Holdings (Kishore Biyani has since taken the liability), and Religare FinVest.