Beleaguered Indian Premier League (IPL) franchise Deccan Chargers' inability to find a buyer has put the Board of Control for Cricket in India (BCCI) in a quandary.
It was expecting the franchise to resolve its financial problems by finding a buyer for itself, but after its owners, Deccan Chronicle Holdings, reportedly rejected a lone bid of Rs 900 crore from PVP Venture Capitals, the Board will have to consider other options to resolve the issue.
A top BCCI official, expressing surprise that the franchise chose to reject the bid at the auction because it considered the price and terms unsuitable, indicated that the Chargers' contract could be terminated at the Working Committee meeting on September 15 and a new tender floated.
'We are very surprised that the bid was rejected by Chargers'
There is also the possibility that the PVP Venture Capitals, which has interests in real estate and finances film projects, could be given ownership of the team.
"We will discuss the entire issue now and see what can be done. It is now up to the Working Committee to take a final decision on the issue," the official said.
"We are very surprised that a bid of Rs 900 crore-plus was rejected by Chargers. We thought that for a company that is in financial mess, the offer was a good one as it would have helped them clear their players' payment from the last edition. I guess they are being governed by the banks and that is the reason for rejecting the offer," the official said.
Deccan Chargers won the second edition of IPL
Deccan Chronicle Holdings purchased the Hyderabad franchise for Rs 428 crore in 2008. The team finished last in the inaugural IPL but came back strongly to win the next edition in South Africa in 2009, and placed second last in the most recent edition in May.
The BCCI will wait till 5pm on September 15, when the time frame of one month given to Deccan Chargers ends, to decide on its next course of action.
"If they don't pay the players' salaries, obviously the team will cease to exist. In any case they did a very wrong thing by mortgaging a BCCI property (IPL team) to the bank," an official said.
BCCI disbanded the Kochi franchise earlier
According to the IPL constitution, the BCCI has right to encash the bank guarantee and pay the players' salaries from it. There is a precedence when Kochi Tuskers Kerala team was disbanded and BCCI encashed the bank guarantee.
This is the first time an entire IPL franchise has been put on the block by its owners, although Rajasthan Royals sold a small stake in 2009 to actress Shilpa Shetty and her husband, Raj Kundra.
Earlier in June, DCHL had appointed investment banking institution, Religare to find a potential buyer but they were unable to find one, who would readily buy the team with its financial liabilities.
The new buyer will be under obligations
According to the tender notice, which appeared a few days back in national newspapers, 'under this invitation to tender issued by DCHL, the winning bidder will acquire from the DCHL 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 and which competes in the Indian Premier League and which has the opportunity (if applicable and subject to qualification) to compete in each and any CLT20 which is staged from 2013 onwards'.
The term 'as is where is' means that the new buyer will have to use the name Deccan Chargers and will have to clear the liabilities of the current owner.
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