Mumbai: Lenders to the debt ridden mortgage financier Dewan Housing Finance Corp. Ltd (DHFL) have asked the four bidders to get back with a revised offer by 31 October as part of the on-going resolution process, according to a person familiar with the matter.
DHFL had received bids from Adani Group, Piramal Enterprises, US-based Oaktree and Hong Kong-based SC Lowy to either pick stake in the company or buy out assets. The decision comes after the committee of creditors met on Monday.
“We are looking at a much improved bid, at least as much as 2x times the initial bid offer. The bids will have to come in by 31 October after which the CoC will need to finalise the resolution plan and send it to the RBI by 16 November. RBI will take at least 45 days to give its approval and then send it to National Company Law Tribunal,”’ said the person cited earlier.
“We don’t have time for seeking fresh bids as there are tight timelines,” the person added.
US-based asset management firm Oaktree has made an offer to take over the entire company for ₹28,000 crore while Piramal has bid for the retail books for ₹15,000 crore. Adani Group is keen on the construction finance and Slum Redevelopment Area (SRA) books and has offered around ₹3,000 crore while SC Lowy wants to take over the construction finance books.
The Wadhawans, erstwhile promoters of DHFL, had proposed to transfer the rights, title and interest in at least 10 projects valued at ₹43,879 crore and settle the dues with banks. A Press Trust of India (PTI) report dated 19 October said that the erstwhile promoters have written to RBI appointed administrator Subramaniakumar saying that their offer would ensure maximum value for the assets that have been put on the block.
“The CoC is not considering this offer made by the promoters,” added the person cited above.
Meanwhile, the housing finance company has been seeing an improved recovery in its business after it recovered nearly ₹1100 crore in September through repayments and balance transfers.
The Reserve Bank referred DHFL, the third largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings in November 2019.
DHFL was the first finance company to be referred to NCLT by the RBI using special powers under section 227.
Prior to that, the company’s board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).
SBI is the lead banker with an exposure of over ₹10,000 crore to DHFL.
According to a filing last month, fraudulent transactions worth ₹17,394 crore were reported at DHFL during FY07 to FY19, as per a report of transaction auditor Grant Thornton.
Banks have an exposure of ₹38,000 crore to DHFL. The total debt of DHFL including to fixed deposit holders, mutual funds and unsecured lenders are at around ₹1 trillion.