Lenders ask DHFL bidders to further sweeten offers by first week of November

NEW DELHI:  After getting 90 days extension from the National Company Law Tribunal (NCLT) for the insolvency process, lenders of debt-ridden Dewan Housing Finance (DHFL) have asked all its four bidders, including Adani Group, US-based Oaktree and Hong Kong-based SC Lowy and Piramal Enterprisesto come up with better bid offers by November first week.

According to sources, lenders have given time till November first week for bidders to further sweeten their offers, failing which they will decide on the next course of action. Earlier this month, DHFL had received four bids for either picking up stakes in the company or buying out assets.

Adani Group had bid for DHFL’s Rs 40,000-crore wholesale and Slum Rehabilitation Authority (SRA) portfolio, valuing it at Rs 3,000 crore, while Piramal Enterprises had submitted a bid for DHFL’s retail portfolio. It quoted Rs 12,000 crore for the business and has asked for 18 per cent yield on the portfolio.

Oaktree has submitted a bid for the entire company and the bid value is Rs 20,000 crore as against the admitted liability of Rs 95,000 crore along with Rs 10,000 crore cash in hand.

Therefore, accepting Oaktree bid would result in a write-off of Rs 65,000 crore for the lenders led by State Bank of India (SBI). SBI is the lead banker with an exposure of over Rs 10,000 crore to DHFL, while LIC and EPFO will also have to write off nearly Rs 10,000 crore Since investors have submitted poor bids, and now with  extended deadline for resolution, lenders are planning to re-negotiate.

In November 2019, the Reserve Bank of India referred DHFL, the third largest pure-play mortgage lender, to the NCLT for insolvency proceedings. It was the first finance company to be referred to the NCLT by the RBI using special powers under Section 227. he Wadhawans, erstwhile promoters of DHFL, had proposed to transfer the rights, title and  interest in at least 10 projects valued at Rs 43,879 crore.