Lenders of DHFL ask bidders to further sweeten offers; know SBI, EPFO, LIC exposure

Not satisfied with the bids received, lenders of Dewan Housing Finance (DHFL) have asked the four suitors, including Adani Group and Piramal Enterprises, to come up with improved offers for the beleaguered firm in the next few days.

SBI is the lead banker with an exposure of over Rs 10,000 crore to DHFL, while LIC and EPFO will also have to write off nearly Rs 10,000 crore. Reuters

Not satisfied with the bids received, lenders of Dewan Housing Finance (DHFL) have asked the four suitors, including Adani Group and Piramal Enterprises, to come up with improved offers for the beleaguered firm in the next few days. SBI is the lead banker with an exposure of over Rs 10,000 crore to DHFL, while LIC and EPFO will also have to write off nearly Rs 10,000 crore.

According to sources, lenders have given time till October 31 to bidders to further sweeten their offers, failing which they will decide on next course of action.
Earlier this month, Dewan Housing Finance Corporation Ltd (DHFL) had received four bids for either picking up stake in the company or buying out assets. The four bidders are Adani Group, Piramal Enterprises, US-based Oaktree and Hong Kong-based SC Lowy.

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

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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Prior to that, the company's board was superseded and R Subramaniakumar was appointed as the administrator.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).

Since investors have submitted poor bids, lenders are likely to lose over Rs 65,000 crore against the total liabilities of Rs 95,000 crore.

The Mumbai-based mortgage player had total assets worth Rs 93,000 crore with retail and wholesale asset portfolio pegged at Rs 33,000 crore and Rs 48,000 crore, respectively.

Oaktree has submitted bid for the entire company and the bid value is Rs 20,000 crore as against the admitted liability of Rs 95,000 crore with Rs 10,000 crore cash in hand.

Therefore, accepting Oaktree bid would result in a write-off of Rs 65,000 crore for the lenders led by SBI.

Adani Group bid for DHFL's Rs 40,000-crore wholesale and Slum Rehabilitation Authority (SRA) portfolio, valuing it at Rs 3,000 crore.

Piramal Enterprises submitted bid for DHFL's retail portfolio. It quoted Rs 12,000 crore for the business and is asking for 18 per cent yield on this portfolio.

According to bankers, the bid of SC Lowy has many conditions.

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The lenders and bidders are also jittery due to the ongoing CBI and ED investigation against the alleged fraud and siphoning off of huge value by DHFL promoters Wadhwan Brothers by fudging of accounts and creating 2.6 lakh fake accounts, which have been termed as "Bandra Book Entities" in the forensic audit conducted by Grant Thornton, sources had said.?
Meanwhile, the National Company Law Tribunal (NCLT) has granted DHFL 90 more days for corporate insolvency resolution process on account of the lockdown. The fresh deadline ends on January 5, 2021.

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Dewan Housing Finance Adani Group