Money & Banking

Oaktree’s bid to ‘convince’ DHFL lenders

Surabhi Mumbai | Updated on December 27, 2020

In a last-ditch effort to convince the lenders to DHFL, Oaktree Capital has sent a fresh letter to the CoC stating that evaluation of its offer based on incorrect information could be subject to judicial, administrative and investigative review.

Sources said Oaktree has expressed concerns that its bid is being misrepresented despite offering maximum value to the stakeholders.

Oaktree has highlighted that in terms of total recovery being offered to financial creditors as well as net present value, its financial proposal is clearly superior to all other PRAs.

 

The total recovery for lenders according to Oaktree’s resolution plan is envisaged at ₹38,400 crore and the NPV could be about ₹36,418 crore.

Sources said Oaktree has stated that the total cash amount that the CoC would receive immediately on the implementation of its resolution plan would be about ₹17,400 crore.

For DHFL’s stake in its life insurance subsidiary, ₹Rs 1,000 crore will be paid to the financial creditors unconditionally and through upfront cash before the Resolution Plan is implemented. It will also be providing additional interest income of ₹Rs 1,700 crore as upfront cash on a committed basis.

In terms of equity infusion, Oaktree is understood to have clarified that it is committed to providing fresh capital infusion of ₹1,000 crore as a cushion to DHFL lenders, by way of a firm commitment letter.

It is also understood to have emphasised that it will create a clean structure and all fresh capital Infusions injected by it into DHFL will benefit the business and its stakeholders.

Oaktree is also understood to have raised concerns about the proposed merger of Piramal’s existing housing finance business with DHFL.

Published on December 27, 2020

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