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DHFL lenders agree to invite new bids after protest from suitors; Piramal may bid for entire portfolio

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Only the existing four suitors- Adani Group, Piramal Group, Oaktree Capital and SC Lowy will be allowed to participate, and given options to bid under their preferred option, said one of the people quoted above.

Lenders to bankrupt Dewan Housing Finance Limited (DHFL) have re-opened bids for the troubled company, after the suitors’ protests against Adani Group’s surprise offer.
According to three people in the know, the committee of creditors for DHFL will put the resolution to re-invite bids to vote today. Only the existing four suitors- Adani Group, Piramal Group, Oaktree Capital and SC Lowy will be allowed to participate, and given options to bid under their preferred option, said one of the people quoted above. The lenders of DHFL had invited bids under four options- entire book, or one or more of (a) retail portfolio, (b) wholesale portfolio, and (c) slum rehabilitation book.
“In order to achieve the objective of maximisation of value for all stakeholders pursuant to request for resolution plans published on September 16,2020….the existing PRAs (prospective resolution applicants) will be given a final opportunity to submit revised and duly executed resolution plans,” read the resolution being voted on today. CNBC-TV18 has reviewed a copy of the minutes of the meeting, and the resolution to re-invite bids.
“The existing PRAs may submit their final and best offer in the revised submission on or before December 10, 2020…If the existing PRAs do not submit a duly executed resolution plan on or before December 10, 2020, then resolution plan submitted by such existing PRA on November 17, 2020 will be considered as their final resolution plan for evaluation,” the document said. Another person in the know added that the December 10 deadline is tentative, and the resolution document may be tweaked to allow more time until December 13 as per some lenders' request.
The committee of creditors (CoC) will open all bids in December once the deadline ends latest by December 13, and evaluate the options on the table, taking into consideration all bids received until then, said a person involved. This would be the final round of bidding, and no further extensions or revisions will be granted, as per two banking executives with exposure to DHFL.
SC Lowy, which had made the lowest bid of about Rs 2,300 crores for the SRA book in the last round of bidding on November 17, is unlikely to participate in the new round, said another person in the know. “They know they are the lowest and don’t stand a chance. SC Lowy has also asked for their Rs 100 crores of earnest money deposit (EMD) back, but if they withdraw midway, they may not be legally entitled to it, so the CoC may allow them to to either make a token bid or waive off the penalty,” this person said.
Piramal Group, which had made an offer of about Rs 26,500 crores for the retail book in the last round of bidding, may now submit a bid for the entire book, said people involved in the matter. This is because the remaining suitors – Adani Group and Oaktree Capital- are both keen on the entire book, and Piramal Group is keen to stay in the race. “Maybe RBI’s internal group recommendation that corporates might be allowed into banking has also prompted all of them to make more aggressive offers,” added a person.
CNBC-TV18 had earlier reported that in the last round of bidding, Oaktree had offered Rs 31,000 crores for the entire portfolio, Piramal Group Rs 26,500 crores for the retail book, SC Lowy Rs 2,300 crores for the SRA book, and Adani Group about Rs 2750 for the wholesale and SRA book, which it later revised to over Rs 31,000 crores for the entire book. This had prompted Piramal Group and other suitors to protest, and they also threatened to withdraw from the process altogether if lenders considered Adani Group’s new offer, CNBC-TV8 had reported.

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