At least 15 suitors have shown interest in acquiring troubled mortgage financier Dewan Housing Finance Corp. Ltd (DHFL) under the bankruptcy process before the deadline for submission of expressions of interest (EoIs) ended at midnight on Monday, said two people aware of the matter, requesting anonymity.
According to CNBC-TV18, KKR India Financial Services Ltd, and conglomerates Welspun Group and Adani Group, are among suitors who have expressed interest under ‘Option I’ to take over the entire business. Global alternative investment management firm Oaktree Capital, ARCIL Asset Reconstruction Co. and Bain & Co. are the other players to have also expressed interest to acquire the firm under ‘Option I’, CNBC-TV18 reported.
Under Option I, suitors were invited to submit EoIs for the entire business of DHFL as a going concern.
Under Option II, prospective resolution applicants were invited to submit EoIs for one or more groups, or a combination of any asset in isolation across different groups of DHFL. For this purpose, the administrator and committee of creditors (CoC) of DHFL have categorised the business of DHFL into three groups. Group A comprises DHFL’s retail assets, investments, unsecured loans, fixed assets, etc., Group B consists of construction finance loans, mortgage loans, corporate loans and inter-corporate deposits, pass-through certificates (PTCs)/Security Receipts (SRs), while Group C comprises loans to projects relating to Slum Rehabilitation Authority, Mumbai, government of Maharashtra.
DHFL’s creditors will meet on 20 February to discuss the EoIs received from prospective investors, among other items, one of the two people cited above said. They will also discuss the evaluation criteria for bidders, status of claims, and an update on the mortgage lender’s operations, the first person added.
At the last meeting of the CoC on 16 January, lenders relaxed the eligibility criteria for those seeking to buy the assets of the insolvent home financier. While the minimum net worth requirement of bidders was slashed from ₹5,000 crore to ₹3,500 crore, which was proposed by Reserve Bank of India (RBI)-appointed administrator, R. Subramaniakumar, the criteria for assets under management (AUM) and committed funds were lowered to ₹10,000 crore and ₹3,500 crore, respectively, from ₹12,000 crore and ₹5,000 crore.
DHFL’s assets under management are at ₹1.19 trillion, of which ₹63,690 crore is in retail loans and the rest in wholesale.
On 20 November 2019, the central bank had superseded DHFL’s board and, subsequently, referred the mortgage lender to the National Company Law Tribunal (NCLT). The RBI’s initiative was meant to secure the interests of creditors, including fixed deposit holders of DHFL, and check any system-wide shock. DHFL was the first non-bank lender to be referred to the NCLT under the new rules notified by the central government on 15 November.
At a meeting on 30 December, the CoC had approved a plan under which the mortgage lender could resume disbursing home loans, beginning with ₹500 crore a month, to arrest the decline in its loan book.
Meanwhile, the administrator informed creditors last month that the ₹4,100-crore claim by Prudential International Insurance Holdings Ltd has been rejected for lack of documentary proof supporting the claim. The total amount verified by the administrator was of ₹86,035 crore, of which ₹5,015 crore was towards 60,717 fixed deposit holders.