ICICI Bank acquires 32 million shares in Deccan Chronical Holdings

ICICI Bank today said it has acquired 32 million shares or 15.31% of the total diluted capital of Deccan Chronical Holdings Limited (DCHL), taking its total stake in the company to 24.90%.

The bank, which is in a legal tussle with the media firm to recover its Rs 490-crore loan, said it has not taken into account the equity allotment by DCHL to Srei Infrastructure Finance as it was done in breach of a court order.

"The allotment of 6,60,37,735 equity shares by DCHL, disclosed on January 12, 2015 under corporate announcements, has not been taken into consideration as the said allotment is in breach of the interim stay order of the III Senior Civil Judge, City Civil Court, Secunderabad," it said in a statement.

Earlier, ICICI Bank held 20 million shares of the company or 9.59% of the diluted capital before DCHL made fresh issuance of little over 66 million shares in favour of Srei Infra.

According to the bank, the percentage of holding of the bank in DCHL (24.90%) has been computed by considering total equity share capital comprising of little over 200 million shares at a face value of Rs 2 per share.

The share buy by ICICI Bank is a bid to match its share holding in the company with that of Srei Infra, which had emerged as the single largest shareholder post issuance of fresh equity shares in January. This gives rise to a potentially new legal dispute between ICICI Bank, DCHL and Srei over the total diluted equity capital of the company. The allotment of 66 million shares to Srei at Rs 3.18 apiece in January constitutes 24% of the expanded paid-up equity share capital, comprising 275 million shares. The value of the shares allotted to the lender was about Rs 21 crore.

DCHL management last month informed the stock exchanges that the allotment was made in line with the orders by the Debt Recovery Tribunal (DRT)-1, Kolkata, on December 24, 2014, and the decision taken by the board in September last year.

"The said shares have been issued pursuant to the conversion option exercised by Srei Infrastructure Finance Limited as per Section 81(3) of the Companies Act, 1956, and as directed by the said orders of the DRT. The said shares have been issued in the physical form as requested by the lender," it said.