Money & Banking

Oaktree, Piramal ahead in race to acquire DHFL

Our Bureau Mumbai | Updated on October 26, 2020 Published on October 26, 2020

US investment firm has offer ₹28,103 crore for entire portfolio

US-based Oaktree Capital and Piramal Enterprise are ahead in the race to acquire the stressed DHFL.

According to documents reviewed by BusinessLine, Oaktree has made an offer for the entire portfolio at about ₹28,103 crore. It will pay ₹10,357 crore as upfront cash recovery amount to settle the admitted financial creditor claims through existing cash and cash equivalent available with the corporate debtor and infusion of fresh equity or debt. Additionally, it will issue ₹15,800 crore to the financial creditors as non-convertible debentures with a quarterly coupon of 6.5 per cent with a seven-year tenure. It has also proposed to pay towards admitted employee claims.

Also read: Kapil Wadhwan offers to settle all claims of DHFL

Adani Group has put in bids for both the retail and the Slum Rehabilitation Authority (SRA) portfolio of DHFL. The retail bid for about ₹3,100 crore has proposed two options — cash consideration, and cash consideration with deferred instrument.

Piramal Capital and Housing has put in a bid for the retail portfolio of DHFL. It has offered upfront cash of ₹9,000 crore to the financial and operational creditors along with employees and workmen and other creditors. Additionally, it has proposed deferred payment to financial creditors by issuing NCDs worth ₹6,000 crore.

SC Lowy’s bid is for the retail portfolio of DHFL for ₹1,550 crore including upfront cash payment of ₹629.6 crore as well as a guaranteed deferred consideration of ₹320 crore and issuance of security receipts of ₹600 crore.

Also read: 63 Moons seeks probe into Wadhawan settlement offer

Lenders may be able to get just about ₹28,103 crore from the resolution of troubled housing finance firm Dewan Housing Finance Corporation Ltd, which has been bid by Oaktree Capital. The three other bids — by SC Lowy, Adani Group and Piramal Capital and Housing Finance — are for much lower amounts.

CoC to meet on Monday

The Committee of Creditors of DHFL is set to meet on October 26 (Monday) when they will discuss the bids and process ahead.

“There is no option and lenders will have to face a huge haircut. It is unlikely that the bid amounts will be revised upwards,” noted a person familiar with the development.

DHFL became the first financial sector company to be taken into the corporate insolvency process last November. The Covid-19 pandemic and lockdown disrupted the process and the deadline for the submission of bids were postponed a number of times. October 17 was the deadline for the submission of bids.

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Published on October 26, 2020
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