Mumbai: The RBI-appointed administrator of troubled Dewan Housing Finance Corporation Ltd. has sought revised offers for the third time within the existing asset categories that Oaktree, Adani Capital, Piramal Group and SC Lowy bid for earlier.
The move suggests the administrator will not accept an offbeat offer that can trigger a legal battle and delay the resolution process, people with knowledge of the matter told ET, which has seen a copy of the letter. A final decision hasn’t been taken. Final bids will have to be submitted by 10am Wednesday.
Meanwhile, lenders are considering a dedicated package for retail fixed deposit/debenture holders of up to Rs 7 lakh per unit, proposing to repay substantially higher sums. The final decision will be taken soon with the committee of creditors likely meeting on Wednesday.
Since the third week of October, the lenders have been negotiating as they seek the highest possible recoveries from the home financier, which had borrowed about Rs 88,000 crore from banks, institutions and retail individuals.
Last week, Adani Capital sprang a surprise by offering to buy the whole company instead of acquiring the wholesale loans given to institutions. It wrote to the Reserve Bank of India-appointed administrator proposing to pay about Rs 250 crore more than Oaktree Capital, which had offered Rs 31,000 crore for the whole company. No detailed, formal payment schedule has arrived, barring a letter.
“The debt resolution process will lose its sanctity if lenders agree to consider the marginally higher surprise offer, which came beyond the stipulated timeline,” said a senior executive involved in the resolution process.
The matter was discussed at last week’s credit committee meeting, with retail fixed deposit/debenture holders favouring the same. However, institutional lenders highlighted the implications, with possible legal action from other bidders.
“Other existing bidders are likely to take the legal course, which in turn would lead to a lingering, Essar-like situation,” said another executive associated with the DHFL resolution.
DHFL did not reply to ET’s queries. Individual bidders could not be contacted immediately for comment.
OakTree, Piramal Group, Adani Capital and SC Lowy raised their offers to own DHFL assets by as much as 50% after lenders rejected their initial proposals. Bidders have dropped as many as 50 conditions they brought in earlier, paving the way for the resolution process, ET reported on November 10.
Piramal proposed to pay about Rs 23,000 crore, excluding interest on retail loans accrued during the lockdown/insolvency period. It aims to buy the retail assets from DHFL. Adani Capital and SC Lowy are interested in acquiring the loans given to institutions and slum rehabilitation projects.
“We have to still check the details in the revised Adani bid. It is a complicated case and not that straightforward,” said a banker involved in the negotiations. The committee of creditors has to meet and see what is in it for them.
SBI Capital Markets is working out the resolution plan for the financial creditors. It will likely present an analysis to the committee of creditors on Wednesday, when the bids are expected to come up for voting. The bids are divided into two categories: the whole business and piecemeal basis.