Piramal, Oaktree slug it out as race for debt-laden DHFL intensifies

Lenders to meet today to decide on presentations by firms companies

The race to acquire troubled mortgage financer DHFL intensified after Oaktree Capital and Piramal made detailed presentations to lenders through the day.

Bank officials said they (bidders) had gone into exhaustive explanations, and the work might carry on into one more session before they finish work. SBI Caps, process advisor, also made a presentation.

The valuers – JLL and IBSA – are likely to present assessments at the next session on Saturday. All the offers have been made with several conditions, and the lenders will have to take a call by considering their net present value.

One banker privy to proceedings said the offers made by the bidders had many conditions attached. This needs to be put in simple terms to make the offers comparable for lenders to decide which of the two is better. Lenders are expected to vote next week.

All the lenders have made substantial provisions for their exposure to DHFL. This is the first case of a finance company being taken under Insolvency and Bankruptcy Code (IBC) and the Reserve Bank of India is keen to see an effective resolution in this case.

DHFL is undergoing the Corporate Insolvency Resolution Process (CIRP), and is currently being managed by an administrator who is being assisted by an advisory committee in discharging duties, both the advisor and the committee were appointed by RBI.

The US-based asset management fund Oaktree Capital has emerged as the highest bidder by making an offer of Rs 36,646 crore for the entire company. The offer includes Rs 11,646 crore in upfront cash and deferred payments to the lenders. The offer also holds back Rs 1,500 crore, which will be given to banks only after DHFL’s insurance venture is sold and all tax liabilities from the sale are met.

The Piramal group, however, has offered an upfront payment of Rs 13,000 crore and the rest of its Rs 35,550-crore bid in deferred payments. The group has also made a second offer, only for the retail portfolio, at Rs 26,500 crore.

The Adani group did not make an aggressive bid in the fourth round and was third in the race.