Oaktree sweetens DHFL bid further
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DHFL owes close to ₹85,000 crore to a consortium of lenders led by SBI who are poised to recover more than 40% of the dues if Oaktree’s offer is accepted.
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Oaktree Capital has upped its offer for Dewan Housing Finance Ltd (DHFL) by ₹1,700 crore on Thursday, intensifying a protracted bidding war with Piramal Capital and Housing Finance Ltd for control of the bankrupt mortgage lender.
Oaktree’s offer came a day after Piramal Capital raised its bid by ₹1,000 crore and also improved its offer for a controlling stake in DHFL’s Pramerica Life Insurance Co. to ₹1,000 crore from ₹300 crore. Oaktree had bid ₹32,700 crore in the fourth round that concluded on 14 December, trumping Piramal’s offer of ₹32,250 crore.
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Bidders seem to be making a last-ditch effort to showcase to DHFL’s (Dewan Housing Finance Corporation Ltd) Administrator and its Committee of Creditors that their bid is the best, going by the letters they have written to the key stakeholders involved in DHFL’s resolution process.
This comes ahead of the voting by the CoC on the revised bids for the debt-laden company as part of the Corporate Insolvency Resolution Process.
Pirmal Enterprises
Ajay Piramal, Chairman, Piramal Enterprises Ltd (PEL), on Monday wrote a letter to DHFL Administrator R Subramaniakumar stressing on the objective of value maximisation in assessing the bids.
Already entrenched in the NBFC space, Piramal sees an edge over others
Even as Oaktree Capital has emerged as the highest bidder for Dewan Housing Finance Corporation Ltd (DHFL) in terms of value, Piramal Capital and Housing will try to convince the lenders to look at its overall bid proposition. It is also hopeful that its position of being already entrenched in the NBFC space will give it an additional edge over other bidders.
What could work in Piramal’s favour is that it has offered the highest cash upfront at about ₹12,700 crore while Oaktree has offered about ₹11,600 crore. Piramal is also committing its entire Financial Services Business Unit (FBSU) equity capital of ₹15,600 crore. In addition, an incremental equity of ₹10,400 crore will also be available, if required. This FBSU enjoys AA rating, 33 per cent capital adequacy ratio and 2.2 times debt to equity ratio.