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Piramal emerges as preferred bidder for DHFL after voting by lenders

An announcement is expected soon. The Committee of Creditors will meet early next week to issue the Letter of Intent to the Piramal Group.

January 16, 2021 / 04:58 PM IST
DHFL owes around Rs 91,000 crore to its creditors. (File Image: PTI)

DHFL owes around Rs 91,000 crore to its creditors. (File Image: PTI)

 
 
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Billionaire Ajay Piramal’s Piramal Group has emerged as the preferred bidder for the beleaguered mortgage lender Dewan Housing Finance Corporation (DHFL) by a distance, beating back competition from Oaktree and Adani Capital, a person familiar with the development said.

The Committee of Creditors (CoC) on January 15 overwhelmingly voted in favour of the Piramal Group. “CoC is understood to have favoured the Piramals,” said the person, who didn’t wish to be named.

Piramal Enterprises, a diversified Indian conglomerate, got more than 94 percent votes for its bid. A resolution plan needs a minimum of 66 percent votes to be passed by lenders, who can vote a preference for more than one bidder.

Oaktree, an American asset management company, secured around 45 percent votes, the person quoted above said. Adani Capital is believed to have got 18% votes.

Oaktree's bid for DHFL was at Rs 38,400 crore against Piramal's Rs 37, 250 crore. Piramal's offer, however, had a higher upfront cash payment and is likely to have swung support in its favour.

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The Piramal Group's offer translates to around 43 percent recovery for the DHFL lenders. Public sector banks led by State Bank of India and Union Bank are believed to have gone with Piramal, reports said.

Some of the lenders voted for both Piramal and Oaktree but being a local firm with deep pockets seems to have worked in the favour of Piramal, sources said. Creditors representing around 6.5 percent of votes are said to have abstained.

CoC, which voted on resolution plans submitted by four suitors, will formally meet early next week to issue the Letter of Intent to the Piramal Group.

The bidding war for DHFL has been going on for a while, with the Piramal Group and Oaktree Capital leading the race.

Throughout the bidding process, Piramal maintained its bid had an upper hand over Oaktree for a range of reasons.

Besides the financial aspects, creditors also evaluated the non-financial part of the bids such as regulatory compliance, company track records and future action plan, etc, officials said.

Moneycontrol had reported earlier that Piramal had a clear edge over Oaktree.

DHFL collapsed under the weight of a severe liquidity crunch after Infrastructure Leasing & Financial Services (IL&FS) went bust in late 2018.

Investigations were launched against the DHFL promoters Kapil and Dheeraj Wadhawan on several charges of financial irregularities and alleged ties with the underworld.

DHFL was pushed to the National Company Law Tribunal (NCLT) in December 2019. Since then, the creditors have been attempting a resolution.

DHFL owes around Rs 91,000 crore to its lenders. State Bank of India is its biggest creditor, with an exposure of around Rs 10,000 crore. Other lenders include Bank of India, Canara Bank, NHB, Union Bank of India, Syndicate Bank, and Bank of Baroda.
Dinesh Unnikrishnan
first published: Jan 15, 2021 08:15 pm

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