Deccan Chronicle Holdings Ltd has officially admitted that it is looking to sell its IPL franchise, Hyderabad's Deccan Chargers. The Hyderabad based media company has given the mandate to KPMG Corporate Finance to advise on the sale.
The company informed the BSE that KPMG Corporate Finance was mandated to run the process to identify the strategic buyers for Deccan Chargers. Earlier media reports suggested that Australia-based NRI industrialist Vikas Rambal could be one of the potential buyers for a majority stake in Deccan Chargers. An 80% stake in the franchise is held by the publishing house, and the remaining 20% is held by Group M, the media arm of the ad conglomerate WPP.
Earlier reports have indicated that Deccan Chronicle may sell its entire stake for anywhere between $175-200 million. This might still be a premium of 55-70% over its acquisition price. Deccan acquired the franchise for $107 million and has paid about $5.8 million as players fees.
The team also paid Andrew Symonds $1.35 million, making him the highest paid player in the league. However Deccan Chargers could not make it in the recent IPL, and they finished at the bottom of the table. Also since then there has been a change of guard at Deccan Chargers with Adam Gilchrist replacing VVS Laxman as the team captain and Robin Sharma being fired as the team coach, the things are likely to change at the team.
With some of the franchises like Chennai Super Kings, Kolkata Knight Riders and Rajasthan Royals managing to break even or even spinning a profit, the IPL franchise is turning out to be a lucrative business opportunity..
Vikas Rambal, who is sponsoring Champions League Twenty20 side Waca Warriors, is the chairman of Australia's North West Chemicals and Fertilizers. He had expressed interest in buying an IPL team.
Besides Deccan Chargers, Rajasthan Royals, the IPL champuions backed by UK based investment group Blenheim Chalcot, is another franchise which is looking for investment.
A lot of corporates have also showed interest in having their own teams. Sahara Group was said to be interested in Kanpur team and Reliance ADAG in a Ahmedabad team. Future Group is also said to be interested in buying a team. Some banks and financial institutions have also showed an interest in buying IPL team. Some of the names doing the rounds during bidding process included ICICI Venture, Sequoia Capital and India Value Fund.
Also international players like Providence, Macquire Bank, DE Shaw, Deutsche Bank, Alcazar & Engelfield have also showed interest.
Since IPL might allow new teams only after a couple of years, this is the only opportunity to buy a team.