Brief Rationale DECEMBER 19, 2016 CARE REAFFIRMS the RATING

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Brief Rationale DECEMBER 19, 2016 CARE REAFFIRMS the RATING Brief Rationale DECEMBER 19, 2016 CARE REAFFIRMS THE RATING ASSIGNED TO THE BANK FACILITIES OF K.P.H DREAM CRICKET PRIVATE LIMITED Ratings Facilities Amount Ratings1 Remarks (Rs. crore) CARE A3+ Short-term Bank Facilities 35* Reaffirmed [A Three Plus] 35 Total Bank Facilities (Rupees Thirty Five Crore only) *The bank facilities are backed by personal guarantees from Mr Mohit Burman, Ms Preity Zinta, Mr Ness Wadia and Mr Karan Paul, in the proportion of their shareholding in the company. Furthermore, these promoters have also provided an undertaking to meet the shortfall (if any) in the debt servicing and maintain their shareholding in the company during the tenor of the loan Rating Rationale The rating assigned to the bank facilities of K.P.H Dream Cricket Private Limited (KPH) continues to derive strength from the strong promoter group & regular financial support in the past to fund various business needs, stable revenue profile and high worldwide popularity of the Twenty20 format of the game. The rating is, however, constrained by the weak financial risk profile of the company marked by negative net worth due to losses in the past. Going forward, the ability of the company to garner better ticketing & sponsorship revenue, which is directly linked to the performance of the team in the upcoming editions of the Indian Premier League (IPL), while maintaining the cost structure, shall remain critical. Furthermore, any decline in the popularity of the game going forward and adherence by KPH to the clauses laid down in the BCCI-franchisee agreement, shall remain the key rating sensitivities. Background KPH was incorporated in March 2008, with Dabur group's Mr Mohit Burman (having 48% shareholding in KPH, as on March 31, 2016), Wadia group's Mr Ness Wadia (23%), Bollywood actress Ms Preity Zinta (23%), and Mr Karan Paul of the Apeejay Surendera Group (6%) holding major stake in the company. KPH is in the business of dealing with commercial activities related to cricket and owns the team representing Punjab, ‘Kings XI Punjab (KXIP)’ in the Indian Premier League (IPL). The IPL is a professional league for Twenty20 cricket championship in India. It was initiated by the Board of Control for Cricket in India (BCCI) and is looked after by the IPL governing body (BCCI-IPL) which is headquartered in Mumbai. The IPL works on a franchisee based system where players, from around the world, are hired and transferred. In April-2008, KPH acquired the right to operate KXIP franchisee and became member of the IPL against payment of consideration amount of Rs.304 crore for a period of 10 years (i.e. Rs.30.4 crore is payable by the franchisee to BCCI every year starting from IPL-2008 to IPL-2017). The terms of purchase agreement also provide for additional consideration which will be payable after completion of 10 years i.e. IPL-2018 onwards for an amount which will be equal to 20% of the yearly revenue and the franchisee can go up to perpetuity. In FY16 (refers to the period April 01 to March 31), KPH reported a total operating income of Rs.103.31 crore with PAT of Rs.3.32 crore, as against a total operating income of Rs.115.95 crore with PAT of Rs.12.77 crore in FY15. 1Complete definitions of the ratings assigned are available at www.careratings.com and other CARE publications 1 Credit Analysis & Research Limited Brief Rationale Analyst Contact Name: Mr Sudeep Sanwal Contact: 0172-5171101 Cell: 9958043187 Email: [email protected] **For detailed Rationale Report and subscription information, please contact us at www.careratings.com CARE has classified instruments rated by it on the basis of complexity. This classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write to [email protected] for any clarifications. Disclaimer: CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors. 2 Credit Analysis & Research Limited Brief Rationale CONTACT Head Office Mumbai Mr. Amod Khanorkar Mr. Saikat Roy Mobile: + 91 9819084000 Mobile: + 9198209 98779 E-mail: [email protected] E-mail: [email protected] CREDIT ANALYSIS & RESEARCH LIMITED Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022 Tel: +91-22-6754 3456 | Fax: +91-22-6754 3457 | E-mail: [email protected] AHMEDABAD JAIPUR Mr. Mehul Pandya Mr. Nikhil Soni 32, Titanium, Prahaladnagar Corporate Road, 304, PashupatiAkshatHeights, Plot No. D-91, Satellite, Ahmedabad - 380 015 Madho Singh Road, NearCollectorateCircle, Cell: +91-98242 56265 Bani Park, Jaipur - 302 016. Tel: +91-79-4026 5656 Cell: +91 – 95490 33222 E-mail: [email protected] Tel: +91-141-402 0213 / 14 E-mail: [email protected] BENGALURU Mr. Deepak Prajapati KOLKATA Unit No. 1101-1102, 11th Floor, Prestige Meridian II, Ms. Priti Agarwal No. 30, M.G. Road, Bangalore - 560 001. 3rd Floor, Prasad Chambers, (Shagun Mall Bldg.) Cell: +91-9099028864 10A, Shakespeare Sarani, Kolkata - 700 071. Tel: +91-80-4115 0445, 4165 4529 Cell: +91-98319 67110 E-mail: [email protected] Tel: +91-33- 4018 1600 E-mail: [email protected] CHANDIGARH Mr. Sajan Goyal NEW DELHI SCF No. 54-55, Ms. Swati Agrawal First Floor, Phase 11, 13th Floor, E-1 Block, Videocon Tower, Sector 65, Mohali - 160062 Jhandewalan Extension, New Delhi - 110 055. Chandigarh Cell: +91-98117 45677 Cell: +91 99888 05650 Tel: +91-11-4533 3200 Tel: +91-172-5171 100 / 09 E-mail: [email protected] Email: [email protected] PUNE CHENNAI Mr.Pratim Banerjee Mr. V Pradeep Kumar 9th Floor, Pride KumarSenate, Unit No. O-509/C, Spencer Plaza, 5th Floor, Plot No. 970, Bhamburda, SenapatiBapat Road, No. 769, Anna Salai, Chennai - 600 002. ShivajiNagar, Pune - 411 015. Cell: +91 98407 54521 Cell: +91-98361 07331 Tel: +91-44-2849 7812 / 0811 Tel: +91-20- 4000 9000 Email: [email protected] E-mail:[email protected] COIMBATORE Mr. V Pradeep Kumar T-3, 3rd Floor, Manchester Square CIN - L67190MH1993PLC071691 Puliakulam Road, Coimbatore - 641 037. Tel: +91-422-4332399 / 4502399 Email: [email protected] HYDERABAD Mr. Ramesh Bob 401, Ashoka Scintilla, 3-6-502, Himayat Nagar, Hyderabad - 500 029. Cell : + 91 90520 00521 Tel: +91-40-4010 2030 E-mail: [email protected] 3 Credit Analysis & Research Limited .
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