Adani, Piramal, others revise offers for DHFL

Oaktree Capital has raised its bid price for the entire portfolio to ₹33,000 crore from ₹27,800 crore earlier, sources with knowledge of the development said

Suitors for the troubled non-banking finance company Dewan Housing Finance Corporation (DHFL) have raised their offer price in the revised bids submitted for the company, sources said.

Adani Group, Piramal Enterprises, U.S.-based Oaktree and Hong Kong-based SC Lowy have submitted 10-70% higher price for either a stake in the company or buying out some of its assets.

Oaktree Capital has raised its bid price for the entire portfolio to ₹33,000 crore from ₹27,800 crore earlier, sources with knowledge of the development said.

Piramal has significantly revised its bid for the retail book to ₹26,500 crore from ₹15,000 crore offered earlier.

Adani Properties has also raised its bid for the wholesale and Slum Rehabilitation Authority (SRA) assets to ₹3,000 crore from ₹2,200 crore earlier. It has also offered ₹50 crore for the slum redevelopment book, they said.

SC Lowy has upped its bid for the non-SRA book to ₹2,300 crore from ₹1,550 crore earlier.

The new bids have been submitted after the lenders asked the bidders to revise their offer.

DHFL promoter Kapil Wadhawan had proposed to transfer the rights, title and interest in at least 10 projects valued at ₹43,879 crore and settle the dues with banks. Mr. Wadhawan has written to the Reserve Bank of India-appointed administrator Subramaniakumar saying that their offer would ensure maximum value for the assets that have been put on the block.

Promoters hold about 39.21% stake in DHFL. Bankers want promoters’ stake to fall below 10% after the stake sale as part of the resolution plan.

A Committee of Creditors, overseeing the resolution plan, is expected to meet next week to finalise the bidder.

The CoC was hoping to finalise the resolution plan by November 16 before it could send it to the RBI for review.

Last month, the National Company Law Tribunal (NCLT) had allowed 90 days extension for the resolution process till January 5.

Sources said both Oaktree Capital and the Piramal Group’s offers factor in a little under ₹10,000 crore cash from DHFL’s books.

Currently, DHFL has cash of almost ₹8,000 crore on its books, which is expected to rise to ₹10,000 crore by March — and this entire amount would be used to repay lenders as per the plans submitted so far.

DHFL’s liquidation value is expected to be around ₹25,000 crore, and the earlier offers were not significantly higher than the amount, prompting lenders to call for revised bids.

With the current offers, lenders may recover over 35% of the debt, they said.

DHFL is the first financial services company which has been sent to NCLT under the insolvency and bankruptcy code (IBC).

DHFL is facing claims of ₹87,031 crore from financial creditors.

Its large lenders include State Bank of India (including SBI Singapore) with ₹10,083 crore exposure, Bank of India ₹4,125 crore, Canara Bank ₹2,681 crore, NHB ₹2,434 crore, Union Bank of India ₹2,378 crore, Syndicate Bank ₹2,229 crore and Bank of Baroda ₹2,075 crore, Indian Bank ₹1,552 crore, Central Bank ₹1,389 crore, IDBI Bank ₹999 crore, and HDFC Bank ₹361 crore.

DHFL had total assets amounting to ₹79,800 crore as of March 2020, as per its annual report. Of these, ₹50,227 crore of assets forming 63% of the total portfolio were reported as non-performing assets (Gross NPAs). Of this, its retail book stood at ₹33,500 crore, with gross NPAs of ₹7,147 crore forming 21.32% of the total portfolio.

The wholesale book, including SRA loans, stood at ₹42,860 crore, of which a whopping ₹39,690 crore or 92.61% of the entire portfolio is categorized as gross NPAs.

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