Oaktree Cap emerges highest bidder for DHFL; outbids Adani and Piramal

CNBC-TV18 had earlier reported that six suitors had shown interest in acquiring the insurance business stake.

Piramal Group, which had earlier only bid for the retail book, has submitted bids under two options in the current round, as per two executives who spoke on the condition of anonymity. It submitted one bid for the entire portfolio and a second bid for the company’s retail book.

Piramal Group has offered a total of Rs 35,550 crores for the full portfolio. The offer includes an upfront cash payment of Rs 10,000 crores to the financial creditors. Piramal’s offer also includes Rs 3,000 crores interest earned from cash on DHFL’s books, and another Rs 200 crores from the proposed sale of DHFL’s stake in Pramerica Life Insurance, CNBC-TV has learnt. Excluding the interest component and gain from insurance business sale, Piramal Group’s offer would stand at about Rs 32,350 crores.

Piramal Group also retained its bid for the retail book at Rs 26,500 crores.

Adani Group, whose unsolicited last-minute offer had sparked a protest from the other bidders and resulted in the fourth round of bids being called, has surprisingly bid the lowest for the entire portfolio of DHFL, CNBC-TV18 learnt.

Adani Group submitted bids under two options in the latest round ending this morning, said people in the know. For the entire portfolio, Adani has offered Rs 29,860 crores, with an upfront cash payment component of Rs 11,000 crores, said three people in the know. Its total offer also includes Rs 3,000 crores interest earned from cash on DHFL’s books, and Rs 250 crores from the insurance business sale. Without these, Adani Group’s offer would stand at Rs 29,860 crores.

Adani group’s second bid for the wholesale and slum rehabilitation books was retained at Rs 2,750 crores, added one of the people quoted earlier.

SC Lowy did not offer any revised bid in the fourth round, according to people involved in the deal. It had bid Rs 2,300 crores for the slum rehabilitation book in the earlier round, and being the lowest bidder, was not expected to participate in the current round, CNBC-TV18 had earlier reported.

Meanwhile, in yet another letter to the Administrator, former promoter Kapil Wadhawan has offered to settle dues of the company. "I have been addressing correspondence repeatedly to draw attention to various relevant facts and circumstances that have a significant bearing on the resolution of DHFL and the intrinsic value of the company as well as the gross inadequacy of the bids being submitted. Fortunately, as matters stand, (and apparently taking into account the validity of the concerns being raised by me from time to time in the correspondence) fresh bids have been invited by the Administrator. Without prejudice to what I have stated herein below, I would hope that, at least this time, all the facts and circumstances that I have been repeatedly adverting to have been duly impressed upon the bidders so as to ensure that the bidders submit bids which are reflective of the correct value of DHFL."

He added, "…I do believe that my proposal is workable and in fact, were to be given access to the information and data of the company, I would be in a position to further improve upon the offer that I have made my proposal provides for a full repayment of 100% principal to all creditors within 7-8 years with an upfront payment of Rs 9,000 crores. If the bids received for DHFL continue to be as low as they were previously, I would request the committee of creditors to consider my settlement proposal instead rather than permit DHFL to be sold for a song."

The committee of creditors (CoC) met earlier this morning and opened all the bids received so far and heard bidders making presentations on their latest offers. The CoC will consider both offers made today and in the last round, and consider the higher of the two in its final evaluation, said people involved in the matter. SBI Capital markets, which is advising lenders on the sale of DHFL, will present the final evaluation matrix for lenders to consider on December 18, and the committee may put all the bids to vote by December 23, said a senior executive involved in the process.

Last week, Oaktree Capital Management had raised concerns about the bidding process with DHFL’s administrator and the creditors' committee. Oaktree sought clarification on whether the current round of bidding that ended this morning (December 14), would be the last and final round, as the lenders have not explicitly stated whether they would allow further revisions. CNBC-TV18 has reviewed the contents of this letter.

DHFL is facing claims of Rs 87,031 crore from financial creditors under NCLT. With the current highest offer of Rs 36,646 crores, the lenders would still face a large haircut of Rs 50,385 crores or almost 58 percent.