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Adani Group calls rivals ‘cartel’, tells DHFL bid done within process: Report

In a letter to the RBI-appointed administrator Adani Group said it has “followed due process to make the highest offer so lenders get the highest value for assets"

November 27, 2020 / 01:29 PM IST
DHFL (File Image: PTI)

DHFL (File Image: PTI)

Adani Group has written to the administrator of Dewan Housing Finance Corporation (DHFL) that “rival bidders are preventing value maximisation and their deposits should be forfeited for doing so.”

In a letter dated November 22, Adani Group told the RBI-appointed administrator that it has “followed due process to make the highest offer so lenders get the highest value for assets” but some rival bidders were “preventing value maximisation,” Business Standard reported.

It also termed these rivals a “cartel” for trying to “restrict full and fair competition,” the report said.

Moneycontrol could not independently verify the report.

The group in the letter acknowledged that its initial expression of interest (EoI) was for DHFL’s wholesale and slum redevelopment authority (SRA) assets only, and they expected to complete the deal with Piramal Enterprises – which only bid for the retail assets, a source told the paper.

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However, when bids were opened it “realised rivals had made bids that did not reflect the value of the company” and hence put an offer for the entire company. Other bidders Piramal, Oaktree (US) and SC Lowy (Hong Kong) had complained against Adani’s changed bid.

Adani in turn pointed out an “important flaw” stating the administrator put conditions on their offer while inviting fresh bids on November 17, despite the bidding document allowing applicants to revise their offer – thus their bid was in accordance with the processes.

“The committee of creditors (CoC) and administrator are duty-bound to take steps that resulted in value maximisation for all stakeholders,” the letter said.

Adani further noted that it had improved its unconditional offer in the final bid including Rs 11,000 crore upfront cash and Rs 19,000 crore payment to lenders with interest; and expressed willingness to “further improve” when revised bids are called.

DHFL, Adani Group, Piramal Enterprises, Oaktree and SC Lowy refused to respond to queries, as per the report.

Reports on November 17 said that Piramal Enterprises asked the CoC to reject Adani Properties' proposal to bid for DHFL's entire portfolio or it would withdraw from the process. In a letter written to the RBI-appointed administrator on November 13, Piramal Enterprises strongly protested the move, calling Adani's proposal to change its bid after the deadline disruptive and vitiated.

Promoters hold about 39.21 percent stake in DHFL. Bankers want promoters' stake to fall below 10 percent after the stake sale as part of the resolution plan. The CoC was hoping to finalise the resolution plan by November 16 before it could send it to the RBI for review. Last month, the National Company Law Tribunal (NCLT) had allowed 90 days extension for the resolution process till January 5.
Moneycontrol News
first published: Nov 27, 2020 01:29 pm

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