IPL buy: CESC chief sees 'some' outgo from Phillips Carbon

CESC Ltd’s franchise, the New Rising Promoters Private Limited, on Tuesday won the bid floated by the Board of Control for Cricket in India (BCCI) for a new IPL team. The company has acquired rights for the Pune team for the upcoming season of IPL.

Speaking to CNBC-TV18, CESC Chairman Sanjiv Goenka said that the CESC will not see any cash outflow due to the IPL team.  The IPL team will not remain the group's subsidiary for a long time, he said adding that the Group will own the team for a period of two years and will pay Rs 16 crore to BCCI every year. Other expenses will depend on factors like sponsorships as well as the Group will benefit from various branding opportunities, he said. Goenka also said that except Phillips Carbon, none of the other subsidiaries will see cash outflow. Below is the verbatim transcript of Sanjiv Goenka's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Latha: Can you tell us the financials as well as does it stay with CESC, does it go the promoters?A: It is a group which has won the bid and it will be the group, which will promote this company and it will not be a subsidiary of CESC but it will be a part of the family and maybe some other companies in the group. So I think that is the way it has planned and we are very excited about it.Sonia: There will be a cash outflow that the group will have to make, will it in anyway impact CESC which is the listed company?A: Not at all. Just zero impact.Latha: Even at the time of payment it is not going from CESC?A: No it is not.Latha: When I read the release to the BSE, I got the idea that you will eventually transfer to the promoters, not so even now you are not touching the CESC kitty?A: No, there is no money coming in from CESC.Sonia: Can you give us a sense of what the impact would be on the group in the sense how much would the cash outflow be for the group as a whole?A: It is for a period of two years and we outflow to BCCI Rs 16 crore a year and the rest is the factor of how you manage the cost and what kind of sponsorships you get in. So these things only time will say but I do not expect it to be significant that is first point and second point is there are significant branding opportunities.Latha: None of the group companies, listed companies are going to perceive any financial outgo?A: CESC will no financial outgo for sure. There may be some financial outgo if at all from a company like Phillips Carbon but from nowhere else.