Lenders to debt-ridden DHFL set to seek consensus on final offers

The lenders to Dewan Housing Finance Ltd (DHFL) have received four revised bids for the company, for the whole or part of it, but they have not yet opened the offers and are seeking a consensus on the process.

A notice by the company to the stock exchange has said the committee of creditors (CoC) has received an email from a bidder with attachments, which have not yet been opened.

A banking source said Piramal Enterprises sent the email containing the revised password-protected offer because it did not want any information to be let out.

“The Administrator has ... received an email with certain attachments from one of the applicants, the contents of which are not yet known since the e-mail has not been opened by the Administrator. The CoC during their meeting decided to not open any of the ‘Final Resolution Plan’ or the e-mail received until a consensus by CoC is attained collectively for the same,” said the notice to the stock exchanges.

Piramal had revised, in the second round, its bid to Rs 25,000 crore for the retail books. That includes deferred payments in seven years with interest worth Rs 3,000 crore.

This was similar to US-based fund Oaktree’s offer for all of DHFL’s assets, for which too deferred payments are to be made over seven years.

It’s important for Piramal Group to acquire DHFL’s retail books because its steady cash flow will complement its wholesale books, which are facing a downturn due to the slowdown in the real estate sector.

Both the Piramal and Oaktree offers reckoned on giving Rs 12,000 crore, currently on DHFL’s books, to lenders.

The bankers, on the other hand, want more upfront cash from the bidders so that they (the bidders) have “more skin in the game”.

“The lenders had a very bad experience with private equities’ participation in the IBC (insolvency and bankruptcy code) when they gave offers but later withdrew once they were announced as highest bidders. They are taking legal advice on Oaktree’s conditions,” said a banking source.

Spokespersons for Oaktree, Piramal, and Adani Group declined to comment on the matter.

The lenders are planning to complete selling the insurance venture of DHFL first so that it does not impact the sale of the parent firm. If any foreign company buys the stake in DHFL, then it may not get clearance from the insurance regulator because it will breach the FDI (foreign direct investment) cap in the sector.

DHFL owns 49 per cent in Pramerica Life Insurance while the rest is owned by its foreign partner.

Adani Group surprised the rival bidders when it made an offer for the entire company instead of bidding only for the wholesale assets, which it did in the first round.

Adani Group offered Rs 31,250 crore to the banks against the Rs 31,000 crore of Oaktree. The fourth bidder, SC Lowy, bid for the wholesale books, but the riders it had failed to pass muster. Its latest offer in the third round of bids is not known.

The lenders, which have made claims worth Rs 95,000 crore against the company, want to close the process as early as possible because it will be almost a year of the Reserve Bank of India superseding the board of the company and appointing an administrator.

When the lenders sought an expression of interest for the company, almost 24 companies from all over the world responded. But of these, only four came forward with offers.

The lenders will now pick the best offer on the table. The fear the case may end up in court because several top companies, including its former promoter, are involved.

The former promoter of DHFL had offered to make a bid for the company but the administrator did not take it into account.