Debt-ridden media firm Deccan Chronicle Holdings Ltd has allotted fresh shares to SREI Infrastructure Finance in a transaction which will give the Kolkata-based lender around 24 per cent stake in the company, according to a stock market disclosure.
Deccan Chronicle is issuing around 66 million equity shares at a price of Rs 2 each to SREI.
The shares have been issued pursuant to the conversion option exercised by SREI Infrastructure Finance and as per order of debt recovery tribunal, it said in the filing.
The allotment makes SREI the single-largest shareholder of the media firm. The promoters held 15.4 per cent stake, almost all of which was pledged with lenders, as of September 30, 2014. This has shrunk to around 11.7 per cent.
SREI Infra had given short-term loan of around Rs 220 crore to Deccan Chronicle and had earlier initiated legal proceedings to recover its money.
In 2013, SREI Infra had approached the Debt Recovery Tribunal (DRT). It is said to have security of around five properties of Deccan Chronicle in Hyderabad and Chennai mortgaged against the loan.
Deccan Chronicle is the publisher of publications such as Deccan Chronicle and Financial Chronicle. At present, the whole company – Deccan Chronicle – is worth around Rs 50 crore on the stock market.
Shares of Deccan Chronicle were trading at Rs 2.43 per share, up 4.74 per cent at 2:33 PM in strong Mumbai market on Monday.
(Edited by Joby Puthuparampil Johnson)