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DHFL was the first finance company to be referred to NCLT by RBI using special powers under Section 227.
DHFL was the first finance company to be referred to NCLT by RBI using special powers under Section 227.

DHFL lenders seek higher bids by 31 Oct

  • DHFL has received bids from Adani Group, Piramal Enterprises, US-based Oaktree and Hong Kong-based SC Lowy to either pick a stake in the company or buy out assets

Lenders to debt-ridden Dewan Housing Finance Corp. Ltd (DHFL) have asked the four bidders for the company to get back with a revised offer by 31 October as part of the ongoing resolution process, according to a person familiar with the matter.

DHFL has received bids from Adani Group, Piramal Enterprises, US-based Oaktree and Hong Kong-based SC Lowy to either pick a stake in the company or buy out assets.

The lenders’ 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 (committee of creditors) will need to finalize the resolution plan and send it to RBI (Reserve Bank of India) by 16 November. RBI will take at least 45 days to give its approval and then send it to NCLT (National Company Law Tribunal),"’ said the person. “We don’t have time for seeking fresh bids as there are tight timelines."

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 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 the erstwhile promoters have written to RBI- appointed administrator R. Subramaniakumar saying their offer would ensure maximum value for the assets that have been put on the block.

“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 retrieved nearly 1,100 crore in September through repayments and balance transfers.

RBI referred DHFL to the NCLT for insolvency proceedings in November 2019.

DHFL was the first finance company to be referred to NCLT by RBI using special powers under Section 227.

Prior to that, its board was superseded, and Subramaniakumar was appointed 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 in FY07 to FY19, according to a report by transaction auditor Grant Thornton.

Banks have an exposure of 38,000 crore to DHFL. The total debt of DHFL, including fixed deposit holders, mutual funds and unsecured lenders, stands at around 1 trillion.

State Bank of India is the lead banker with an exposure of over  <span class='webrupee'>₹</span>10,000 crore to Dewan Housing Finance Corp.mint.
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State Bank of India is the lead banker with an exposure of over 10,000 crore to Dewan Housing Finance Corp.mint.
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