Debt-laden media house Deccan Chronicle Holdings Ltd. (DCHL) has been given three weeks time to file its counter affidavit to the winding-up petition filed by state-run financial institution IFCI Ltd.
The winding-up petition by the IFCI was filed in the Andhra Pradesh High Court on 30th of July. Filing its petition, the state-run financial institution expressed apprehension over the financial health of Deccan Chronicle and requested the court to order winding up and liquidation of the company's assets so that it could recover its dues.
The IFCI claims that it had invested around Rs. 25 crore through 250 non-convertible debentures (NCDs) issed by the media house last year. The NCDs, which carried interest of 11.25 per cent, were to mature on June 26 this year, but the media house defaulted in making the payment on the NCDs' redemption.
In its petition, the IFCI said, "We understand the respondent (DC) has defaulted in respect of many other liabilities and apprehends many more winding up petitions may be filed by other creditors."
It cited the London-based Royal Courts of Justice's order in favor of Tim Wright, former CEO of IPL cricket team Deccan Chargers, which is owned by Deccan Chronicle, asking the company to pay nearly Rs. 90 crore towards the breach of employment contract.
The IFCI said such liabilities might erode the entire net worth of Deccan Chronicle and ultimately make the company commercially unviable and insolvent.
But giving a much-needed reprieve to Deccan Chronicle, Justice Seshasayana Reddy of the High Court posted the case after three weeks.
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