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CNBC-TV18 Exclusive: Enam may back out of deal with Oaktree for DHFL’s insurance biz

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CNBC-TV18 Exclusive: Enam may back out of deal with Oaktree for DHFL’s insurance biz

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Enam was in talks with Oaktree to jointly bid for Pramerica Life Insurance Limited (PLIL), the insurance joint venture of DHFL.

Enam Holdings is likely to back out of a deal with US-based Oaktree Capital Management to help the latter acquire Dewan Housing Finance Limited’s (DHFL) insurance business, said two people in the know of the matter.

Oaktree Capital’s acquisition of DHFL’s stake in its insurance business, Pramerica Life Insurance Limited (PLIL), is seen as one of the key hurdles in its proposal to acquire the bankrupt financier. Being a foreign entity, Oaktree has to contend with the 49 percent FDI restriction in the insurance space, and had therefore proposed an Alternative Investment Fund (AIF) structure to acquire PLIL as part of its offer.
Oaktree is understood to have reached out to Enam Holdings, among others, to come on board as a promoter for the AIF structure which would acquire DHFL’s stake in PLIL, said two people aware of the developments. However, talks between the two have not materialised, and it is understood that Enam may back out of the deal, the people quoted earlier added.
The development may hurt Oaktree Capital’s prospects when it comes to acquiring DHFL, with lenders set to begin voting on the proposals made by the four suitors including Oaktree Capital. CNBC-TV18 had earlier reported that Piramal may have an edge because it has offered more cash upfront to lenders, and a relatively easier insurance business takeover proposition compared to rival Oaktree, which made the highest overall bid to acquire DHFL.
“Oaktree has four arrangements for the AIF structure, one of which is Enam,” said a person involved in the deal. With the deal with Enam unlikely to materialise, Oaktree would have to find other partners, and continues to be in talks with three other investors, CNBC-TV18 has learnt.
When CNBC-TV18 reached out to Oaktree Capital for a comment on the story, the US-based firm termed it “incorrect and inaccurate.” Enam did not offer any comment on the story.
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