Nimbus struggles to keep deal alive
Nimbus is yet to execute the annual bank guarantee of Rs 960 crore it needs to keep the telecast rights deal with BCCI alive.Updated: Mar 21, 2007 01:02 IST
Nimbus Sports, which had inked a deal with the Board for Control of Cricket in India (BCCI) for the telecast rights for international and domestic cricket in India a year ago for Rs 2,724 crore, is struggling to keep the contract alive.
The annual bank guarantee of Rs 960 crore the sports company was required to execute by March 1 has not been furnished so far, and some BCCI committee members have demanded that Nimbus' previous year's bank guarantee of Rs 375 crore be encashed.
Contract with BCCI
A BCCI meeting is scheduled for Thursday to review the scenario arising from the notice given to Nimbus to execute its fresh bank guarantee and clear its outstandings of Rs 46.7 crore. In case Nimbus forfeits its bank guarantee, it would signal the end of the BCCI-Nimbus contract.
It would also mean that BCCI would have to put the telecast rights for the remaining three years back on the bidding block.
Conceding that Nimbus' bank guarantee had created a difficulty, BCCI secretary Niranjan Shah said the sports company had been given "some more time to execute the demand".
"We cannot take a decision now on terminating the contract. A meeting has been scheduled for March 22 to review the situation," Shah added.
Harish Thawani, chairman of Nimbus, said that he could not comment on the issue of bank guarantees "without breaching confidentiality provisions in our contracts... but the initial bank guarantees remain valid till 30 April 2007".
He claimed that the contract provided for a reduction in fees if fresh regulatory provisions impact Nimbus. The sports company now has two options: continue with the contract if the cricket board agrees to reduce its fee, or annul the deal. "We have two options - of receiving compensation from BCCI in terms of reduction of rights fee, or terminating its agreement with BCCI if the issue of encryption remains unresolved," Thawani said.
First Published: Mar 21, 2007 00:31 IST