Following the failure of the Deccan Chronicle Holdings (DCHL) to repay a term loan of Rs 250 crore, IDBI Bank has invited bids to transfer its rights on the trademarks of the group?s four publications ? Deccan Chronicle, The Asian Age, Andhra Bhoomi and Financial Chronicle. Last September, bankers had refused to restructure R3,300 crore of loans to the Andhra Pradesh-based media group. IDBI Bank has sought an earnest money deposit of R15.15 crore for Deccan Chronicle, R20 lakh for Andhra Bhoomi, R60 lakh for Asian Age and R5 lakh for Financial Chronicle. The bids need to be submitted by March 11. DCHL announced a net loss of over R1.040 crore for the 18 months to September 2012 against a profit of R162.58 crore for the 12-month period to March 2012.
?Due to the failure on the part of DCHL to repay the financial assistance provided to it, IDBI Bank has decided to enforce the security by transferring, to the highest bidder, its rights/interest on the trademarks for a consideration. However, the determination/ acceptance of the highest bidder shall be at the sole discretion of IDBI Bank and IDBI Bank shall not be liable or bound to give any reason for such acceptance/rejection. Accordingly, IDBI Bank hereby invites all the interested persons to submit their proposals/bids for acquiring, on an ?as is? basis, the trademarks collectively or separately for each trademark,? a request for proposal document floated by the bank on February 27 said.
Analysts said it wasn?t immediately clear whether the DCHL promoters have mortgaged the titles to any other lender in the 28-member consortium. Canara Bank has conducted a forensic audit of the accounts of the company.
A trademark is a distinctive name, symbol, motto, mark or design registered with the Trademark Authority of India under the Trademark Act that legally identifies a company or its products and services and prevents others from using identical or similar marks. The deeds of hypothecation for the trademarks in favour of IDBI Bank were executed by the promoters of DCHL in September 2012, while the agreement for a R250-crore term loan was initially entered into on March 23, 2011, and later rolled over by another six months on March 24, 2012. According to the terms of the loan agreement, DCHL was also required to create a first charge on its fixed assets so that the minimum security cover available to IDBI Bank during the tenor of the loan did not fall below 1.25 times and after the rollover, the loan, including principal and interest, was to be repaid in three equal instalments on July 26, 2012, August 26, 2012 and September 26, 2012.
The hypothecation deed had stated that in the event of any breach or default by DCHL, IDBI Bank would have the option of, within a period of 15 days, to sell the trademarks in all the classes that it is registered in or advertising the availability of the goods manufactured under the trademark, among other things.
In June last year, CARE Ratings downgraded both the long-term and short-term bank facilities of DCHL from CARE AA to CARE B and from CARE A1+ to CARE A4 respectively. The revision in the rating was a result of the default by the company on short-term non-convertible debentures.