Home >industry >media >Deccan Chronicle turnaround in two quarters, says promoter

Hyderabad: Financially troubled publishing firm Deccan Chronicle Holdings Ltd, which has been hit by several lawsuits by lenders seeking to recover dues, said it expects to return to health by the end of September.

P.K. Iyer, vice-chairman of the debt-laden company, told shareholders at an annual general meeting (AGM) on Thursday that the management will engineer a turnaround within “two quarters". The management has thus far ensured that its financial troubles didn’t hamper the core print business, Iyer said. To indicate the seriousness of the management’s efforts in reviving the company, he pointed out that the paper production has not been stopped “even for a single day" and the company has been paying salaries on time.

The company swung to a loss of 2.2 crore for the quarter ended December from a profit of 21 crore in the year-earlier period, while revenue dropped 58% to 102.32 crore from 243.98 crore. It had narrowed its loss from 166.24 crore in the June quarter to 100.05 crore in the September quarter. The publisher of Deccan Chronicle, Financial Chronicle and Asian Age newspapers and the Telugu daily Andhra Bhoomi is laden with debt to the tune of 4,000 crore and the promoters’ shareholding has more than halved to 32.66% as of 31 December from 73.83% on 30 June after some lenders invoked pledged shares.

Thursday was the first time the company’s management has spoken publicly since its financial woes came to light with the resignation of former managing director N. Krishnan in July last year. The AGM, for the period April 2011 to September 2012, was attended by few shareholders and lasted about 20 minutes.

The promoters, chairman T. Venkattram Reddy and T. Vinayak Ravi Reddy, whose appointment as managing director and vice-chairman of the company was approved by the shareholders at the meeting, were not present. Iyer, DCHL’s third promoter, presided over the meeting.

DCHL shares fell 5.62% to 3.19 on BSE while the benchmark Sensex rose 0.70% to 18,835.77 points.

Investors said it was unclear how the management will turn the company around. “Deccan Chronicle is a good brand but Mr. Iyer did not specify how he plans to revive the company. He did not talk about the restructuring," a retired army officer and investor in DCHL said after attending the AGM. “The company ventured into unrelated areas like IPL and wasted money." He refused to reveal his name.

DCHL said it had filed a “claim petition" against the Board of Control for Cricket in India (BCCI) before an arbitrator appointed by the Bombay high court claiming compensation for losses it suffered due to the termination of its Indian Premier League (IPL) franchise, Deccan Chargers. The team, which the company purchased for $107 million in January 2008, was terminated by BCCI in October after DCHL failed to furnish a 100 crore bank guarantee.

Iyer said the company treated IPL as a business opportunity and that he expects to recover damages from BCCI. “This is an indefinite right and the company can operate the franchise as long as the IPL tournaments are conducted by BCCI," DCHL said in a report distributed to investors.

Analysts say it will be a difficult task to revive the company without the cooperation of lenders. “From the position they are in, it will be tough unless the lenders take a huge pare back (on their dues). I don’t think lenders will take a huge pare back without knowing what exactly transpired," said Satish Kantheti, head of the equity research division at Hyderabad-based brokerage house Zen Securities Ltd.

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