Lenders back Piramal’s bid for DHFL

Marco Green
January 18, 2021

Dewan Housing Finance Corporation Ltd (DHFL) on Sunday said that its Committee of Creditors (CoC) has approved the resolution plan of Piramal Capital and Housing Finance Ltd.

As per the reports, Piramal's bid received 94 percent votes, while the competing bidder Oaktree Capital received only 45 percent of the votes.

If the Piramal group succeeds in acquiring DHFL, it may merge Piramal Capital & Housing Finance with the mortgage lender. Voting for the resolution plans ended late Friday evening.

Against this, Oaktree offered Rs 38,400 crores, including a Rs 1700 crore addition in the bid. This included Rs 17,100 crores in the form of upfront cash, insurance business value, interest earned on cash, etc. Oaktree's offer also included Rs 300 cr for FD holders, and Rs 21,000 crores in the form of debt instruments spread over 7 years. Before that, the company " s board was superseded and R Subramaniakumar was appointed as the administrator. It's large lenders are SBI, including SBI Singapore, with ₹10,083-crore exposure. However, it had offered a higher upfront cash payment that may have appealed the CoC members. The Piramal's offer translates to around 43 per cent for the creditors of DHFL. Last Saturday, Piramal had claimed that its bid was better than Oaktree's.

"Reserving the right in a bidding framework is blatantly illegal and mischievous. if this were to be allowed; everyone will bid Re 1 for all assets, "reserve" the right to increase, look at other bids and increase to slightly more than the highest bid", Piramal said.

As per the resolution plan put to vote, which CNBC-TV18 has reviewed a copy of, Piramal Group offered Rs 37,250 crores in total to acquire DHFL.

SC Lowy, meanwhile, offered Rs 2,300 crore for its non-slum redevelopment authority loan book. However, out of these Rs 50,227 crore or 63 per cent of the total portfolio was reported as gross NPAs.

Other reports by Click Lancashire

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