MUMBAI: Kolkata-based SREI Infrastructure FinanceBSE 0.38 % Ltd (SIFL) has once again initiated process to take control of the Hyderabad-based debt-ridden media firm Deccan Chronicle HoldingsBSE -4.17 % Ltd (DCHL), a year after its first such move was opposed by some of the lenders.
DCHL’s promoters have defaulted on loan repayments of Rs 4,000 crore from 18 banks and financial institutions, including SIFL.
The infrastructure lending firm, which claims to be the largest shareholder in DCHL after it converted part of its Rs 220 crore loan into 24% equity stake in the media company in 2015, has called for an extraordinary general meeting of DCHL shareholders on March 20 to take control of the management by inducting five new directors on the board of the beleaguered company.
Among proposed directors is Manoj Mohanka, former chairman of Network18 Media and Investments, who had last year also tried to acquire the cash-strapped media house through SIFL.
Mohanka had accepted SIFL’s proposal to infuse fresh capital in the company. However, ICICI BankBSE 0.94 %, which had in February 2015 announced the acquisition of 24.9% stake in DCHL through invocation of pledged shares, had challenged the allotment of shares to DCHL arguing that it amounted to breach of an interim stay issued by the courts.
Later, Indiabulls and Tata Capital also challenged SIFL’s move and the meeting never took place.
However, Sunil Kanoria, vice chairman of SIFL is hopeful that this time EGM will take place. “We have 24% stake in DCHL, but there is no clarity on the financials of the company. We are calling this EGM and after getting shareholders approval, we will appeal in the High Court for further approvals,” he told ET.
SIFL has also proposed appointment of other directors including former journalist Sabina Inderjit, former group CFO of Punj LloydBSE 0.70 % Shamik Roy, banking and finance expert Prashant Mustii, and principal associate of law firm Khaitan & Co Dipen Chatterjee.
In its notice to DCHL shareholders, SIFL has said that assistance was required with regards to financial discipline, business management and manpower management to revive the operations of the media house.
“These proposed directors are experts from diverse fields, including the media business and it is believed that their induction to the board of directors of the company will strengthen the management of the company and bring in more professionalism to the company. It is hoped that this will assist in turning around the operations of the company and resolving the current situation,” the notice said.
Incidentally, SIFL will have to approach the National Company Law Tribunal (NCLT) for a prior approval for the appointment of new directors after the EGM’s decision over their appointment as a status quo order, issued by the Company Law Board in September 2014, is still in effect.
As of its last available financial records, DCHL had accumulated losses of Rs 513 crore as of September 30, 2012.