All three bidders for Dewan Housing Finance are likely to junk some conditions

All the three bidders for Dewan Housing Finance - Piramal, Oaktree, and the Adani are likely to junk some conditions that are part of their offer to avoid future litigation as the lenders prepare to begin voting Wednesday on their proposals.
Voting may extend up to Jan 10 in the new year as thousands of creditors at DHFL will be given enough time to deliberate and seek internal approvals to decide their preferred bidder, said sources with the knowledge of the matter.

“It is called sweeteners in legal parlance, which will help facility the proposed deals without changing the commercial offers,” one of the persons cited above told ET. DHFL did not reply to ET's query.

Lenders held a marathon meeting over the weekend and negotiated hard with bidders, who have promised to come back with new adjustments without tweaking any commercial offer.

For example, bidders were seeking waivers/reliefs from the National Company Law Tribunal. Bankers have managed to cut those conditions as they convinced bidders of future prospects in consultation with lawyers, sources said.

The committee of creditors (CoC) to the debt laden home financier discussed all three bids for the company in detail since Friday's meeting that extended until Saturday evening. Based on their discussion the CoC sought clarifications to individual bidders separately.

All three companies have met with lenders starting with Piramal on Friday followed by Oaktree Capital and Adani group. SBI Capital and valuers also participated in the meetings.

SBI Capital Markets has analysed all three bids in detail in a presentation to lenders. The lenders obtained a report from RBSA Advisors on fair valuation and liquidation valuation. A presentation will be made to lenders soon on the same.While RBSA is valuing different loan assets of the company, real estate consultancy JLL is looking at valuations of DHFL’s property assets.

Oaktree's plan also involved creation of a Rs 12000 crore sub debt from the extinguished debt of DHFL. This sub debt has a three-year moratorium after which it will be paid for by internal accruals of DHFL in effect allowing the company to escape tax and other compliance to take money out of DHFL. The main contentions for Oaktree's plans included the ‘complexities’ of the insurance business and the Rs 1,500 crore deferred payment which lenders have sought clarity.

For Piramal, some lenders raised doubt over a portion of unsecured debt the company proposed and also sought clarity on the first charge of debt because the company will ultimately be merged with the parent. Piramal is confident that its plan is clear that the bonds will be backed by assets of the merged entity and will be pari pasu with the old debt in terms of charge. Piramal is also pointing out that is it a AA rated company better than the below investment grade or no rating for Oaktree which will help in DHFL's revival.

For Adani the questions centered around what it plans to do with the company since it has no experience in financial services. Adani said lenders must be grateful that their intervention has actually given them better value and their plan has no conditions like Oaktree.