DHFL Resolution: What Bidders Are Offering In The Latest Round
The latest round of bidding for assets owned by Dewan Housing Finance Corp. has garnered offers from three of the four bidders, according to three people with direct knowledge of the matter.
Oaktree Capital Management, Piramal Group and Adani Group have submitted fresh offers for all of DHFL’s loan assets, the people told BloombergQuint on the condition of anonymity.
As per the plans submitted by the three bidders, Oaktree Capital’s offer allows lenders to realise funds the quickest. The US-based investor is offering Rs 35,000-36,000 crore to financial creditors, which includes an upfront payment of Rs 11,500 crore and the remainder being paid over seven years, two of the three people quoted above said.
In comparison, while Piramal Group’s total offers about same amount, the financial creditors will get Rs 12,000-13,000 crore upfront and the remainder over 10 years.
The Adani Group is offering to pay around Rs 33,000 crore, which includes Rs 11,000 crore paid upfront and the remainder over seven years, according to the two people quoted above.
In all three plans, the upfront payout to creditors includes Rs 3,000 crore which DHFL has earned in the form of interest on outstanding loans in the one year since its insolvency proceedings have been initiated.
Separately, Kapil Wadhwan, promoter of DHFL, has once again offered to settle the entire dues of the financial creditors in a letter dated December 13. BloombergQuint has reviewed the copy of the proposal. Wadhawan has offered to repay lenders Rs 9,000 crore upfront and pay the remaining dues over 7-8 years.
Apart from the bids for the complete portfolio, two bids have come in for parts of the portfolio.
The Adani Group is offering to pay Rs 2,500-3,000 crore to creditors for the wholesale and slum rehabilitation loans portfolio. Piramal Group, too, has submitted a separate plan, just for the retail assets controlled by the home financier, where it reiterated its earlier offer to pay Rs 26,000 crore.
According to the norms laid out by the financial creditors of DHFL, bidders may choose to submit bids for specific assets of the company, or may even bid for the entire loan book. The offer which gives lenders the most returns would be considered as the final bid.
Bidders are making presentations to lenders, which will help in assessing the plans over the next few days, the people quote above said. Once all lenders have completed their independent assessments, the preferred plans will be put on vote to determine the highest bidder, they said.
SC Lowy, the fourth bidder, which has so far been actively participating in the bidding process, has not submitted any fresh bid in the current round, the people said.
Oaktree Capital, Adani Group, Piramal Group and DHFL’s administrator have yet to respond to BloombergQuint’s queries emailed on Monday morning. Subsequent queries mailed on Monday afternoon were also not answered.
The fourth round of offers 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, as compared with the earlier offer of only buying the wholesale assets and slum rehabilitation projects.
The unsolicited bid led to complaints from other bidders, especially the Piramal Group, which contested that the unsolicited offer was in breach of the bidding process laid down by the creditors.
To avoid any legal issues and give all bidders a chance, the financial creditors agreed to do a fresh round of bidding, where all bidders were allowed to submit fresh bids, without limiting them to the asset groups they had originally shown interest in.
Outstanding loans on DHFL’s lending book stand at more than Rs 87,000 crore, which include retail loans worth over Rs 30,000 crore. The company went under insolvency in November last year, after the Reserve Bank of India asked lenders to initiate proceedings. The insolvency process has seen delays owing to the Covid-19 pandemic.
On Sunday, DHFL’s administrator informed stock exchanges about fraudulent transactions worth an additional Rs 1,058 crore uncovered on the company’s books.