Kishore Biyani to take over Rs170-cr Deccan Chronicle loan

The Promoter Group of Future Capital Holdings Ltd has agreed to take over the entire loan exposure of Rs170 crore lent to Deccan Chronicle Holdings Ltd and Aviotech Ltd at book value, Future group said in a statement to the stock exchanges on Friday.

About 56.3 per cent of Future Capital is owned by Pantaloon Retail (India) Ltd and its promoter Kishore Biyani. Warburg Pincus has also become a shareholder in the company after it had decided to buy a stake in Future Capital for Rs560 crore.

In effect, the announcement means that Kishore Biyani has taken over the Rs170 crore loan to facilitate the acquisition of the group's finance arm by the US private equity giant Warburg Pincus.

Two months back Warburg agreed to buy 53.67 per cent stake in Future Capital from its promoters for Rs560 crore and then follow it with the mandatory open offer to minority shareholders for a further 20 per cent stake (See: Warburg Pincus makes open offer for 26 per cent in Future Capital Holdings).

However, the Rs170 crore loan to Hyderabad-based news publisher Deccan Chronicle became a bone of contention.

With this development Future Capital will cease to have any exposure in Deccan Chronicle Group.

However, there continues to be a series of developments, including a winding up petition by IFCI and a complaint of forgery by Karvy.