Money & Banking

Oaktree Capital wants CoC to consider its additional offer of ₹1,700 crore for DHFL

Our Bureau. Mumbai | Updated on January 07, 2021 Published on January 07, 2021

Oaktree Capital has fired a fresh salvo, asking the Committee of Creditors to consider its additional offer of ₹1,700 crore for Dewan Housing Finance Corporation Ltd.

In a letter to the CoC, Oaktree Capital said: “...we committed to provide additional interest income of ₹1,700 crore, a right we reserved in our resolution plan, that commitment is being ignored. If the second highest bidder was awarded the opportunity to provide additional interest income, we should be permitted the same opportunity, and should derive the same benefit in the evaluation of the bids.”

The global alternative investment management firm has further contended that the ₹1,000 crore of value it has prescribed to the life insurance subsidiary – Pramerica Life Insurance – is not being considered.

It has sought that the ascribed value should be given credit for “what it is” – upfront cash to the benefit of the financial creditors.

“We have respected the resolution process, answered your questions, provided clarifications when they were required, and accommodated the concerns of all stakeholders,” Oaktree further said in the letter.

Bone of contention

The bone of contention for Oaktree has been that the additional interest income it has offered through an e-mail on December 24 has not been considered by the CoC, despite a similar increase by the second higher bidder, which is Piramal Capital and Housing Finance Ltd.

Clarifying once again on its resolution plan, Oaktree Capital said the upfront cash recovery has been undervalued by ₹2,700 crore. It also said its bid offers a significantly higher fair market, which is higher by ₹4,503 crore than Piramal’s offer.

It has also stressed that its bid is unconditional and fully implementable, and it has committed to infuse capital in DHFL through equity and debt. It has also promised to turnaround the operations of DHFL on a standalone basis, going concern basis without merging it with another entity.

“As you vote on the resolution plans, the burden on responsibility as a guardian of public money and a repository of faith for all DHFL stakeholders is clear,” Oaktree further said in the letter, urging them to vote in favour of the highest bid.

Voting for the resolution plans is expected to get over next week, and the winning bid is likely to be announced later this month.

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Published on January 07, 2021
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