Piramal group more likely to bag DHFL as lenders again Rs 37,250-crore bid

The Piramal group is all set to bag the troubled Dewan Housing Finance Corporation (DHFL), with lenders led by public sector banks backing its Rs 37,250-crore bid for the takeover of the mortgage agency.
According to banking sources, banks weren’t in favour of clearing the bid by the US’ Oaktree Capital, which has been in a fierce battle with the Piramals for the housing finance agency. The Piramal bid acquired 94 per cent voting from the lenders, whereas the required majority is 66 per cent. However, Oaktree’s bid acquired solely 45 per cent backing. The Piramals are more likely to merge DHFL with their monetary providers enterprise as soon as the bid is cleared by the chapter court docket.
The Committee of Creditors (CoC) is predicted to formally clear the proposal within the coming days and ahead it to the National Company Law Tribunal.

DefinedReresolution very importantThe DHFL decision is essential for the monetary sector, which was hit by the collapse of IL&FS and the DHFL disaster. While DHFL owes round Rs 80,000 crore to banks and different collectors, full restoration might not occur as bondholders aren’t positive about getting their a reimbursement.

After Piramal revised its bid, Oaktree had elevated the bid by one other Rs 1,700 crore after the deadline. Oaktree, in a letter to the collectors, had claimed a Rs 2,700-crore undervaluation by the CoC. Oaktree had additionally proposed it might provide Rs 1,000 crore from the sale of DHFL’s life insurance coverage enterprise to the lenders.
Last Friday, Piramal Capital & Housing Finance mentioned its bid for DHFL affords the best upfront money restoration and has the best rating in accordance with the analysis matrix. Piramal mentioned it formally submitted a last bid inside the deadline, whereas Oaktree despatched an extra provide after the deadline, providing Rs 1,700 crore extra.
Realising that its bid falls severely brief, Oaktree despatched an e mail on December 24 — two days after the deadline — providing an extra Rs 1,700 crore, Piramal mentioned. “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 mentioned.
Oaktree’s bid had reportedly claimed that DHFL’s NCDs could be assigned an ‘AAA’ score if their decision plan is accepted. However, score companies aren’t allowed by legislation to offer any ‘credit opinion’ or have ‘indicative credit rating discussions’, Piramal mentioned. Piramal had mentioned the proposed takeover of DHFL’s insurance coverage enterprise by Oaktree might invite regulatory challenges as it’s a international entity. Currently, 49 per cent of DHFL Pramerica Life Insurance is owned as international funding by Prudential International Insurance Holdings.
On November 29, 2019, the Reserve Bank of India (RBI) filed an software for initiation of insolvency towards DHFL, making it the primary non-banking monetary firm (NBFC) to endure the method.
In the primary bidding spherical, Piramal Enterprises supplied Rs 15,000 crore for DHFL’s retail arm, whereas Oaktree supplied Rs 27,800 crore for your complete agency. SC Lowy, in the meantime, supplied Rs 2,300 crore for its non-slum redevelopment authority mortgage e book. After the lenders expressed unhappiness over the low bids, all the businesses revised their bids considerably.
Lenders and collectors want to recuperate Rs 83,000 crore of unpaid loans of DHFL.