Oaktree, the first of the bidders to be called for clarifications, was still awaiting its turn, at press time on Friday, said the people cited above.
“SBI Capital Markets has analysed all three bids in detail in a presentation to lenders on Thursday,” said one of the persons cited above.
Mumbai: The committee of creditors (CoC) may continue to discuss the latest bids for Dewan Housing Finance Corp Ltd (DHFL) on Saturday, said people with knowledge of the matter, adding that most of the debate on Friday centered on offers by Oaktree Capital and Piramal Enterprises. The CoC is to seek clarifications from each of the three bidders — New York-based distressed investment fund Oaktree Capital, Piramal Enterprises and the Adani Group. They have offered to acquire DHFL through a mixture of cash and debt.
Oaktree, the first of the bidders to be called for clarifications, was still awaiting its turn, at press time on Friday, said the people cited above. Though Adani has also been given a chance to present its case, the lenders were more intensely debating proposals by Oaktree and Piramal, which are looking to buy the home financier in its entirety.
“SBI Capital Markets has analysed all three bids in detail in a presentation to lenders on Thursday,” said one of the persons cited above. “The CoC meeting started at 3 pm (on Friday) and looks like it will spill over to Saturday as creditors want absolute clarity on what they are looking at ahead of the vote.”
Following clarifications from bidders, voting on the offers could start December 23 and will be open for 12-15 days, with a result likely in the second week of January.
The lenders are said to be wary of conditions attached to the top two bids by Oaktree and Piramal and may seek adjustments or easing of terms, said the people cited above.
“There are pros and cons to both bids. For example, Oaktree has kept some amount in abeyance due to the uncertainty in the tax liability for DHFL Pramerica Life Insurance Co,” one of them said. “On the other hand, the Piramal bid includes some unsecured bonds, which lenders want clarity on. Both these points are part of the discussion.”
Oaktree has offered Rs 11,646 crore to the lenders and Rs 21,000 crore of bonds payable over seven years. The cash or equity offer includes about Rs 10,400 crore of cash already in the business and equity of Rs 1,500 crore.
Piramal has offered Rs 12,700 crore, which includes DHFL cash, and its own equity contribution of Rs 2,500 crore. Piramal is also offering Rs 19,550 crore of bonds payable over 10 years and an extra payment to fixed deposit (FD) holders. Apart from this, Piramal has offered to merge its financial services business, having Rs 10,400 crore equity, with DHFL, thereby strengthening its ability to issue new debt. Piramal’s capital adequacy ratio at 33% is currently one of the highest among non-banking finance companies (NBFCs).
Adani, which only marginally increased its bid in the fourth round after raising prices through an unsolicited bid in November, is offering Rs 10,750 in cash and Rs 250 crore for the insurance business with Rs 19,110 crore in debt payable over seven years.
The lenders have got a report from RBSA Advisors on fair valuation and liquidation valuation. A presentation will be made to the lenders on this. While RBSA valued different loan assets of the company, real estate consultancy JLL is looking at estimates of DHFL’s property assets.
“Lenders are seeking to have a fair idea of the different preconditions in both the main bids because that will determine the net present value, which is crucial to judge who is the preferred bidder. Needless to say that the lower the preconditions, the higher the chances of a bid being chosen,” said one of the persons cited above.
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