DHFL rises 5% as Wadhawan approaches RBI with revised offer

NEW DELHI: Shares of DHFL jumped 5 per cent in Thursday's trade after Kapil Wadhawan came up with a revised proposal for acquiring the housing finance company.

In a letter to RBI Governor Shaktikanta Das, DHFL administrator R Subramaniakumar and the Committee of Creditors (CoC), the erstwhile promoter of the bankrupt NBFC said that Wadhawan would make an upfront payment of Rs 9,000 crore in cash and Rs 31,000 crore will be paid within a period of seven years in equal annual instalments with 8.5 per cent per annum interest.

Following the development, the stock rose 5 per cent to hit its upper circuit limit at Rs 29.65 on BSE.

As per the revised proposal, Rs 12,000 crore will be repaid within a period of seven years in equal annual instalments, following a one-year moratorium with 11 per cent interest after two years of interest moratorium, IANS reported.

A sum of Rs 18,000 crore will be repaid within a period of five years in equal annual instalments, following a five-year moratorium with 11 per cent per annum interest.

Further Rs 5,000 crore will be converted to equity, as per the proposal. Wadhawan also said that Rs 16,158 crore will be converted into zero coupon bonds and can be appropriately hived off to an Asset Reconstruction Company (ARC) and can be recovered through the ARC in order to preserve the debt-equity ratio of DHFL, IANS reported.

A portion of the bonds may also be tied to specific projects and also from excess cash flows following the servicing all lenders, based on agreed parameters of thresholds, he said in his letter.

"The utilisation of cash generation from September 30, 2020 up to the date of the restructuring could also be discussed and agreed upon in keeping with the broad principles above," he said.

Wadhawan wrote: "You will appreciate that the alternate proposal that I have now made is significantly better than the bids made by any of the bidders by a wide margin. It is apparent that the bidders are offering no real value for the wholesale book and are seeking to retain for themselves the profits that they will earn through further retail lending."

He said that if the alternate proposal is properly considered by the RBI, advisors to the Administrator and CoC, it will be apparent to all that not only is the proposal "fully implementable" but is also in the "best interest" of all the creditors, and will ensure the recovery of thousands of crores of public money.