DHFL promoter Wadhawan moves NCLT, urges tribunal to reject Adani, Oaktree, Piramal offers4 min read . Updated: 26 Nov 2020, 09:28 PM IST
- Wadhawan has urged the tribunal not to allow the bids received from the four bidders – Oaktree Capital, Piramal Enterprises, Adani Group and SC Lowy, terming their offers to be 'absurd'
MUMBAI: Crisis-hit mortgage lender DHFL’s erstwhile promoter Kapil Wadhawan has moved the National Company Law Tribunal in Mumbai against the Reserve Bank of India appointed administrator and the committee of creditors (CoC) meant for DHFL’s resolution over the bids made by DHFL’s four suitors.
In the application made on 24 November, Wadhawan has urged the tribunal not to allow the bids received from the four bidders – Oaktree Capital, Piramal Enterprises, Adani Group and SC Lowy, terming their offers to be “absurd".
Adani has made the highest offer among the four bidders with Rs. 31,250 crore for buying DHFL’s entire business.
Wadhawan, along with his original proposal made in October to pay higher than Rs. 43,000 crore, has now appealed before the NCLT that he should be allowed to be a part of the CoC meetings since his plea to the administrator have not worked.
Wadhawan, in his appeal has elaborated about the efforts made by the erstwhile promoters of DHFL after the eruption of September 2018 NBFC crisis to revive the company’s state.
He also explained about the Wadhawans’ efforts to ensure repayments to the creditors and about the resolution plan without any haircut for the lenders to whom DHFL owes around Rs. 88,000 crore.
Wadhawan has appealed to the NCLT to consider the financial package for revival of DHFL prepared by him.
He said the tribunal may direct that the resolution plan of DHFL be submitted to an independent expert appointed by NCLT along with the bids received from the resolution applicants (the four bidders).
Wadhawan said the independent expert should be directed to submit a report to NCLT, giving the expert’s opinion with regards to the most appropriate plan to be considered in the interest of all the stakeholders and public at large.
“The tribunal should permit the applicant, i.e. Wadhawan (without prejudice to his rights and contentions in the pending proceedings) to address and assist the committee of creditors to appreciate and consider the bids being received for DHFL in the proper perspective and to permit the applicant to assist in the Corporate Insolvency Resolution Process," said Wadhawan’s appeal.
Wadhawan appealed that until the hearing and the final disposal of the Wadhawan’s latest application, the tribunal should direct the RBI-appointed administrator to give him access to all the documents and records of DHFL.
Additionally, Wadhawan has urged the NCLT to ask the CoC and the administrator to defer the consideration on bids received from the four bidders until the hearing and the final disposal of the Wadhawan’s latest appeal.
Wadhawan, in a second letter earlier in November to RBI appointed administrator Subramaniakumar, had sought a second hearing from the lenders to reconsider his resolution proposal that he had submitted in October.
On 24 November Mint reported that DHFL’s lenders are likely to seek fresh bids for the bankrupt mortgage lender after the Adani group’s unsolicited offer last week.
A revised bidding process is expected to realize higher value for banks who currently stand to take significant haircuts on exposures to the lender.
Mint was the first to report on 20 November that State Bank of India (SBI), the lead lender, had asked fellow lenders to persuade all four suitors to the firm to upgrade their offers as an improvement in the asset quality of DHFL has made it more valuable.
The CoC cannot vote on a resolution until NCLT hears the matter on 3 December on the resolution plan submitted by the four suitors.
To be sure, DHFL’s CoC met last Tuesday to discuss ways to deal with the issues involving the offers made by the four bidders.
Piramal and Oaktree have threatened to walk out of the race if Adani’s bid is accepted by the CoC.
DHFL owes Rs. 10,083 crore to SBI alone, out of Rs. 88,000 crore that is due for repayment to DHFL’s 58-odd lenders.
In October, Kapil Wadhawan, the erstwhile promoter of DHFL, wrote a letter to the RBI, stating that the Wadhawan family can monetize the underlying assets of DHFL worth at least Rs. 43,000 crore and repay the lenders.
SBI, in its Tuesday’s meeting has conveyed to the CoC for DHFL’s insolvency resolution process that the bidding rounds for all the four existing potential investors will continue until the investment bid/realisation gets better than the offer of Rs. 43,000 crore that was made by the Wadhawans.
DHFL’s auction took a dramatic turn after Adani unexpectedly offered a higher price than Piramal and Oaktree to buyout DHFL's entire business, despite the binding bidding round getting closed.
Piramal has offered ₹26,000 crore for DHFL’s retail books only while Oaktree had bid ₹31,000 crore for the entire company. Adani had first bid around ₹2,700 crore for the wholesale/slum redevelopment authority books only. But, in a sudden move, Adani decided to bid ₹250 crore more than Oaktree for the entire company.
To this, Piramal wrote an objection letter to the creditors of DHFL, stating that it will take a legal recourse if Adani's bids are accepted.