DHFL: Piramal And Oaktree Capital Weigh Revised Bids For Full Portfolio | BQ Exclusive
At least two bidders for the assets of Dewan Housing Finance Corporation Ltd. are in the process of finalising revised bids for the full portfolio of the insolvent financier, three people with direct knowledge of the matter said on the condition of anonymity. The revised bids follow a fresh offer submitted by the Adani Group, which prompted lenders to restart the process.
Earlier this week, Oaktree Capital Management wrote a letter to DHFL’s administrator and its financial creditors, seeking clarification on whether the current round of bidding is last and final, the people quoted above said. In its communication, Oaktree sought clarification on whether any new bids would be accepted after Dec.14, the current deadline set by the committee of creditors.
Last month, Oaktree Capital had offered to buy all of DHFL’s loans for Rs 31,000 crore.
Separately, according to two of the three people quoted above, Piramal Group has been regularly accessing the data room since Dec. 3 to put together its fresh bids. The Ajay Piramal-headed group is currently in discussions with legal and other experts to come up with an offer for all assets owned by DHFL, the two people said.
Previously, Piramal Group had only bid for DHFL’s retail loan portfolio, offering Rs 25,000 crore against a book worth Rs 30,000 crore.
Oaktree Capital and Piramal Group declined to comment on queries sent by BloombergQuint.
SC Lowy, Reserve Bank of India appointed administrator R Subramaniakumar and lead lender State Bank of India did not respond to queries mailed on Wednesday.
The other two bidders, Adani Group and Hong Kong-based investor SC Lowy are unlikely to submit fresh bids in the current round, the people quoted above said. If bidders do not submit fresh bids in the current round, their last submitted bids would be considered by the committee of creditors.
The new bidding process is a result of an unsolicited bid submitted by the Adani Group last month. On Nov. 17, Adani Group materially changed its previous bid and offered to purchase all of DHFL’s loan assets for Rs 31,250 crore, two of the three people quoted above said.
The unsolicited bid led to complaints from other bidders, especially the Piramal Group. In a letter to the Reserve Bank of India-appointed administrator and financial creditors of DHFL, Piramal Group claimed that the decision by one of the bidders to alter its bid is in contravention with the process laid down by the committee of creditors. It had also threatened legal recourse, if the lenders went ahead with Adani’s offer.
According to the people quoted above, Hong Kong-based investor SC Lowy has also informed creditors that they reserve the right to back out of DHFL's resolution process altogether. SC Lowy had originally bid for DHFL's corporate loans.
To sidestep concerns raised by the bidders, lenders decided to go ahead with a fresh round of bidding, which allowed for revised bids from all.
DHFL was placed under insolvency on orders of the RBI in November 2019. The regulator suspended the housing finance company’s board and appointed an administrator to run daily affairs. The resolution process under the Insolvency and Bankruptcy Code has been going on since then but has seen considerable delays because to the Covid-19 pandemic.