US-based Oaktree offers Rs 20k-cr for DHFL, Piramal, Adani also in fray

Piramal offers Rs 15,000 cr for retail book, Adani offers Rs 3,000 cr for SRA, construction fin books

The lenders to Dewan Housing Finance Corporation (DHFL) have received a cash offer of Rs 12,000 crore from US-based asset management company Oaktree Capital for the entire company. 

Oaktree has offered to pay an additional Rs 8,000 crore over the next few years, with interest to be paid on the balance in the interim period.

Oaktree’s Rs 20,000 crore is pitted against the Rs 15,000-crore offer by Piramal Enterprises for the retail portfolio and the Rs 3,000-crore put on the table made by Adani Group for the construction finance and slum re-development area projects.

“The banks will have to take a call on whether to accept the offers of Oaktree or those of Piramal and Adani Groups,” said a source close to the development. 

“Oaktree will offer Rs 8,000 crore over the next few years, which is close to the G-Sec and is not attractive to the lenders,” the source said.

The bids were opened by the lenders this week. The offer made by the fourth bidder, SC Lowy, for the construction finance books was full of riders and does not look attractive, the source said.

The lenders will start negotiating with the bidders, asking them to improve their offers, the source said. For Piramal Group, the acquisition of the retail books is important to balance its wholesale books, which are facing issues due to the slowdown in the real estate sector. 

“DHFL’s retail books are giving a steady cash flow and will help Piramal,” the source said.

Adani Group has made conservative bids, keeping in mind the slowdown in the real estate sector.

In February this year, the lenders to DHFL had sought offers for the company. Almost 24 companies had shown an interest in DHFL. They included Aion Capital, Adani Capital, Hero Fincorp, KKR Credit Advisors, Oaktree, Morgan Stanley, Goldman Sachs Group Inc, Deutsche Bank AG, Warburg Pincus, SSG Capital, Edelweiss, Lone Star, and Blackstone. All backed out barring the four.

The bids for the company were muted also due to a forensic audit report by Grant Thornton, which revealed a Rs 14,500-crore hole in DHFL’s books.

The report, which has been submitted to the National Company Law Tribunal (NCLT), has said there is a Rs 9,320-crore hole in the wholesale books, a Rs 1,707-crore loss on the SRA count, and another diversion of Rs 3,000 crore in retail loans.

Recovering these loans is doubtful, the report said. Indian lenders, mutual funds, and provident fund have an exposure of Rs 88,000 crore to the company. Of this, State Bank of India has an exposure of Rs 10,000 crore.