Divided lenders, YES Bank worsen Deccan Chronicle woes

Deccan Chronicle is surrounded by bad news all around. On the one hand, no consensus has emerged among its lenders regarding it's admittance to CDR and on the other, its tussle with the BCCI is beginning to have an adverse effect on Deccan Chargers, report CNBC-TV18's Gopika Gopakumar and Ashmit Kumar.

Bankers have stated to CNBC-TV18 that few banks are waiting for the forensic audit to be completed before taking a final call on the restructuring of Deccan Chronicle's debt.
Tuesday's CDR meeting was a damp squib as far as Deccan Chronicle is concerned as the lenders have failed to come to a consensus. Canara Bank has been asked to conduct a forensic audit and the process is expected to take a month’s time.
However, other bankers have gone ahead and given their mandate for the admission of the company into the CDR Cell as they believe that the forensic audit will take a very long time and any delay in the decision on restructuring could put pressure on the financials and bring down the valuation of the company.
Deccan Chronicle Holdings has a total exposure of Rs 4,100 crore across 14 lenders including ICICI Bank, Canara Bank and Axis Bank. YES Bank has thrown Deccan Chargers' defence against the termination by the BCCI into a tailspin. In a fresh submission in the Bombay High Court, YES Bank asserted that its support to the Deccan Chargers was not unconditional as argued by Deccan Chronicle in court.
Deccan Chargers have been fighting it out with the BCCI in the Bombay High Court and with respect to a termination notice that they had been served with. To satisfy the BCCI, some last minute payments have been made to the players of Deccan Chargers and this payment was the one that was facilitated by YES Bank which issued 45 demand drafts of an amount of Rs 33 crore.
To answer questions that had been raised by the BCCI with respect to the financial stability of the group, Deccan Chargers has sighted this as an example of financial institutions backing them unconditionally.
Contrary to that YES Bank on Tuesday in its submission slapped three conditions on the payment that it made- One, that the BCCI will have to withdraw its termination notice. Two, that the amount of Rs 41 crore that is due to the Deccan Chargers by the BCCI will have to be paid immediately and three, that this amount will have to be deposited in the  YES Bank account of Deccan Chronicle.
YES Bank also explicitly stated that if these conditions were not met, it will have to withdraw the demand drafts which would effectively mean that the players of Deccan Chargers will remain unpaid.
Some of the implications include the buttressing of the BCCI's arguments with respect to the financial stability of the group and that Deccan Chargers and the BCCI will have to enter a process of arbitration.
There are questions are being raised about that process apart from a number of other questions that will have to be answered in the further hearings that will continue in the Bombay High Court on Wednesday.