Suitors to bankrupt Dewan Housing Finance Ltd (DHFL) revised their offer after the lenders asked them to do so at its meeting in October. US-based Oaktree Capital is the highest bidder, and Hong Kong-based SC Lowy is the lowest bidder.
DHFL’s committee of creditors (CoC) received revised bids from its four bidders to either buy a stake in the company or buy out its assets. Earlier, the administrators of DHFL had rejected the offer of Kapil Wadhawan, promoter of the company, to settle all dues to the lenders. Oaktree Capital has revised its bid to Rs. 33,000 crore from Rs. 28,000 crore for the entire company. Previously it offered Rs, 15,800 crores for the company, payable after seven years, and Rs. 12,000 crore in cash. Piramal Capital and Housing revised its bid for DHFL’s retail portfolio to Rs.26,000 crore. Adani Group revised its offer for DHFL’s wholesale and Slum Rehabilitation Authority (SRA) asset portfolio to Rs. 3,000 crore from Rs. 2,500 crore. SC Lowy raised its bid from Rs. 1,550 crore to Rs. 2,300 crore for the non-SRA book of DHFL.
According to informed sources, even with the raised offers, the creditors may suffer from a huge haircut. The estimated total liability of the company is at Rs. 85,000 crore while the write-off for lenders is at Rs. 50,000 crore. The bids are revised because the lenders expressed their dissatisfaction over the earlier ones because they were concerned about the haircuts they have to take. DHFL’s CoC expected to meet by November 17 will declare the highest bidder. Oaktree Capital’s bid is greater than the liquidation value of the company, expected to be about Rs. 25,000 crore. In October, the National Company Law Tribunal had allowed a 90-day extension until January 5 for the resolution process.
As per its annual report of DHFL had total assets amounting to Rs 79,800 crore; of these, 63% was as non-performing assets (Gross NPAs). There is rising concern over the ₹5,375 crores FDs with DHFL, belonging to 55,000 FD holders comprising of small investors. The CoC, which has a representative of FD holders, will take the final decision. DHFL was brought into the corporate insolvency process in November last year. The lenders to the company include State Bank of India, SBI Singapore, Bank of India, Canara Bank, NHB, Union Bank of India, Syndicate Bank, Bank of Baroda, Indian Bank, Central Bank, IDBI Bank, and HDFC Bank.
