DHFL lenders unhappy with bids; seek revised offers from all suitors by October 31

Lenders to Dewan Housing Finance Limited (DHFL) have asked all the suitors of the bankrupt mortgage financier to revise their offers by October 31 at the end of a day-long meeting to review bids, multiple people aware of the matter told CNBC-TV18.

All four suitors -- Oaktree Capital Management, Piramal Enterprises, Adani Properties and SC Lowy -- made detailed presentations on their offer to the lenders in the creditors committee meeting held on October 26, but lenders were unimpressed with the low recovery promised, sources said.

CNBC-TV18 was the first to report on the bids received for DHFL on October 17.

US-based distressed asset fund Oaktree Capital Management offered the highest recovery to lenders with an offer of Rs 28,000 crore for its entire book, CNBC-TV18 had earlier reported. Oaktree's offer included approximately Rs 12,000 crore as upfront cash and the remaining in the form of non-convertible debentures to be paid over seven years with a coupon of 6.5 percent. However, this offer includes approximately Rs 8,000 crore of cash that is currently on DHFL's books, said familiar with the matter said. This cash on books is projected to increase to Rs 10,000 crore by March 2021.

Piramal Enterprises has offered Rs 15,000 crore in total to acquire DHFL's retail book, CNBC-TV18 had earlier reported. Piramal Enterprises' offer includes upfront cash payment of Rs 9,000 crore and another Rs 6,000 crore in the form of debt instruments. Piramal's offer is also inclusive of the cash on DHFL's books.

Another banking executive added that bids from Adani and SC Lowy are currently too low to be considered by the committee of creditors. Adani Properties' offer for the wholesale book is about Rs 2,300 crore including cash and debt instruments, the executive said. Hong Kong-based SC Lowy has offered a lower amount for the wholesale book, sources said.

DHFL is the first financial services company to be sent to NCLT under the insolvency and bankruptcy code (IBC). It is facing claims of Rs 87,031 crore from financial creditors under NCLT. Its large lenders include State Bank of India (including SBI Singapore) with Rs 10,083 crore exposure, Bank of India Rs 4,125 crore, Canara Bank Rs 2681 crore, NHB Rs 2,434 crore, Union Bank of India Rs 2,378 crore, Syndicate Bank Rs 2,229 crore, Bank of Baroda Rs 2,075 crore, Indian Bank Rs 1552 crore, Central Bank Rs 1389 crore, IDBI Bank Rs 999 crore and HDFC Bank Rs 361 crore.

DHFL had total assets amounting to Rs 79,800 crore as of March 2020, as per its annual report. Of these, Rs 50,227 crore of assets forming 63 percent of the total portfolio were reported as non-performing assets (gross NPAs). Of this, its retail book stood at Rs 33,500 crore, with gross NPAs of Rs 7,147 crore forming 21.32 percent of the total portfolio. The wholesale book, including SRA loans, stood at Rs 42,860 crore, of which a whopping Rs 39,690 crore or 92.61 percent of the entire portfolio is categorised as gross NPAs.