DHFL suitors Oaktree, Piramal, Adani & SC Lowy raise bid prices; lenders may have to write off 65% of their loans

Suitors for the troubled non-banking finance company Dewan Housing Finance Corporation (DHFL) have submitted revised bids for the company under the Insolvency and Bankruptcy Code, sources told CNBC-TV18. The bids are higher than the prices offered earlier.

Oaktree Capital, which had bid Rs 28,000 crores for the entire book is now willing to pay Rs 31,000 crores, CNBC-TV18 has learned.

Piramal Group has significantly revised its bid for the retail book to Rs 26,500 crore from Rs 15,000 crore offered earlier, two people in the know confirmed.

Adani Properties has also raised its bid for the wholesale book to Rs 2,700 crore from Rs 2,200 crore earlier. It has also offered Rs 50 crore for the slum redevelopment book, said a person familiar with the bid details.

SC Lowy has offered the lowest amount but also increased its offer to Rs 2,300 crore from Rs 1,550 crore for the wholesale book.

Both Oaktree Capital and the Piramal Group’s offers factor in a little under Rs 10,000 crore cash from DHFL’s books. Currently, DHFL has cash of almost Rs 8,000 crore on its books, which is expected to rise to Rs 10,000 crore by March- and this entire amount would be used to repay lenders as per the plans submitted so far.

“Oaktree Capital’s offer is the highest so far, and it is also above the liquidation value. No reason why banks shouldn’t accept it,” said a senior banker in the know.

Dewan Housing’s liquidation value is expected to be around Rs 25,000 crore, and the earlier offers were not significantly higher than the amount, prompting lenders to call for revised bids. With the current offers, lenders may recover over 35 percent of the debt. While negotiations with the bidders will start right away, the Committee of Creditors (CoC) may declare the highest bidder by November 17, said a person in the know.

SC Lowy responded to the CNBC-TV18 query saying, “SC Lowy can confirm to have revised their bid and submitted to CoC (committee of creditors).” Responses from Piramal Group, Adani Properties and Oaktree Capital are still awaited.

DHFL 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 2,681 crore, NHB Rs 2,434 crore, Union Bank of India Rs 2,378 crore, Syndicate Bank Rs 2,229 crore and 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 was 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 categorized as gross NPAs.