Real Estate

Oaktree set to take control of DHFL's entire project finance portfolio

K.R. Srivats New Delhi | Updated on September 24, 2019 Published on September 24, 2019

FILE PHOTO   -  REUTERS

Investment management firm submits term sheet to DHFL for latter's project finance portfolio

 

Oaktree Capital, a leading global alternative investment management firm, has moved a step closer to taking control of the entire wholesale book of crisis-ridden DHFL.

DHFL has now received a term sheet from Oaktree for the housing finance company's entire project finance portfolio, which is estimated at about Rs 38,000 crore, sources close to the development said.

This is a non-binding agreement, which will have to be followed by a final legal agreement, they added.

Indications are that an Alternate Investment Fund (AIF-II) structure would be set up to facilitate the transaction, which could see the cash starved DHFL get a cash infusion of at least Rs 8,000-10,000 crore once the entire deal goes through.

"What is being worked out is wholesale book securitisation with an upside. This will help revive the stalled wholesale book," sources said.

Meanwhile, the Slum Rehabilitation Authority (SRA) projects funded by DHFL have been assigned master developers/ managers, who would be responsible for financing, approvals and design of the projects, including bringing working capital from lenders.

This is a significant positive for DHFL as it will bring tremendous execution bandwidth. The master developers are Piramal, Poddar Housing and Adani, sources said.

Debt resolution

DHFL is currently in discussion with a consortium of bankers/ lenders to restructure borrowings. A meeting of the joint lenders’ forum is scheduled for Friday, it is learnt. Lenders are quite hopeful that issues relating to the implementation of the resolution plan will be addressed in the coming days.

Meanwhile, Dewan Housing Finance Corporation (DHFL) will hold a meeting on Wednesday with its bank lenders to discuss a draft resolution plan. On Friday, the company will hold a meeting with all its institutional creditors in connection with the draft resolution plan.

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Published on September 24, 2019
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