The Survival Battle of the Deccan Chronicle


Starting in 1938 as a small partnership firm at Hyderabad, the Deccan Chronicle became the third largest English newspaper in India by 2006. T. Chandrasekhar Reddy, a businessman, had acquired it in 1977 from three founding families. Later, both his sons joined him. The Reddys modernized printing presses, expanded the business and brought the newspaper to the 10th position in India by 2000. Chandrasekhar’s elder son, Venkattram, wanted to achieve more. They restructured the business as a public company, Deccan Chronicle Holdings Limited (DCHL). In 2004, DCHL brought an IPO and was listed on stock exchanges. Besides investing in newspaper business expansion, DCHL also made huge investments in several unrelated businesses. These ventures appeared promising but eventually incurred losses and led DCHL into a debt trap. Also, newspaper input costs increased while competition intensified. The extravagant lifestyle of DCHL owner family members added further financial strain. DCHL management continued borrowing huge unreported loans. In 2012, DCHL turned insolvent and defaulted on repayments due to financial institutions and banks. Its lenders filed lawsuits for loan recovery. Its leaders were arrested in 2015 for fraud. Finally, the case went to the insolvency tribunal. One of the lenders, SREI Infrastructure Finance, proposed to take over DCHL, but the other lenders rejected its offer for want of a better deal. SREI then made a revised offer, which was to be discussed in the lenders’ forthcoming meeting. SREI had to decide whether it was prudent to make another improved offer in case the creditors rejected its revised proposal.

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