Oaktree Capital Management has emerged as the highest bidder for bankrupt Dewan Housing Finance Corp. Ltd (DHFL) in the latest round of the race to acquire the troubled company.
Competitors in the bid
Adani Group, Piramal Group, US-based asset management company Oaktree Capital Management and Hong Kong-based SC Lowy are the four entities that submitted bids for DHFL in October.
About Company
DHFL is the first financial services company that was sent to NCLT under the insolvency and bankruptcy code (IBC).
DHFL is facing claims of Rs 87,031 crore from lenders including 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, among others.
Amount of Bid
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.
Revise in Bid
In the revised bid, Adani Group bid for the entire book, offering a total of Rs 30,000 crore plus interest of Rs 3,000 crore on November 17.
This was more than Rs 28,300 crore offered by Oaktree.
Piramal quoted Rs 23,500 crore only for the retail portfolio of DHFL, while SC Lowy bid Rs 2,350 crore for SRA.
Another fraud reported
On Sunday, DHFL’s company secretary wrote to the stock exchanges, stating that there are certain transactions that are undervalued, fraudulent and preferential, resulting in an additional fraud of Rs 1,058 crore.
The court-appointed administrator said that he had filed an application in respect of loan dues worth Rs 648 crore against property made out to El Dorado Biotech, Fortune Broking Intermediary, Fortune Gilts and Black Rock Financial Services.
The administrator also made an application in respect of an excess amount of Rs 330 crore paid to purchase its property in Kalina, Mumbai, by transferring funds to entities linked to promoters.
The third application is in respect of Rs 80 crore due on an account of inter-corporate deposits (ICDs) advanced to Shrem Group of companies where non-convertible debentures issued by DHFL were pledged to secure repayment of the ICDs.
Company’s Financial
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, and its retail book stood at Rs 33,500 crore.
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