Oaktree emerges highest bidder for debt-ridden DHFL

NEW DELHI: US-based Oaktree on Monday pipped Piramal Enterprises and Adani Group to emerge as the highest bidder for DHFL after fresh bids were invited under the insolvency process, according to sources. The committee of creditors had fixed December 14 as the last for submission of revised bids.

According to the sources, Oaktree raised the bid to Rs 36,646 crore, including Rs 1,000 crore for insurance and Rs 3,000 crore of interest earned, while Piramal Enterprises offered Rs 35,550 crore, including Rs 300 for insurance and Rs 3,000 of interest earned.

However, the sources said, Oaktree has made a conditional offer for DHFL.

Billionaire Gautam Adani’s roads-to-mining group has improved its bid to Rs 33,100 crore for taking over housing lender DHFL, they said, adding this includes Rs 250 crore for insurance and Rs 3,000 of interest earned.

Adani Group, which had initially bid only for DHFL’s wholesale and Slum Rehabilitation Authority (SRA) portfolio, in the revised bid submitted on November 17 offered Rs 30,000 crore plus interest of Rs 3,000 crore for the entire book, an official in lenders consortia had said.

In November last year, the Reserve Bank referred Dewan Housing Finance Limited (DHFL), the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings.

DHFL was the first finance company to be referred to the NCLT by the RBI using special powers under section 227.

Prior to that, the company’s board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).

As of July 2019, the company owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders.

DHFL was sent to bankruptcy after the government on November 15, 2019, enabled the Reserve Bank to sent large financial services companies, excluding banks, to the NCLT for insolvency proceedings.

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 1,552 crore, Central Bank Rs 1,389 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 per cent 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 per cent 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 per cent of the entire portfolio is categorised as gross NPAs.