DHFL Bid: Adani claims rivals are preventing value maximization of assets

Adani Group has written “rival bidders are preventing value maximization and their deposits should be forfeited for doing so” to the administrator of Dewan Housing Finance Corporation Limited (DHFL). It also termed these rivals a “cartel” for trying to “restrict full and fair competition,” the report said.

The group in the letter acknowledged that its initial expression of interest (EoI) was for DHFL’s wholesale and slum redevelopment authority (SRA) assets only, and they expected to complete the deal with Piramal Enterprises – which only bid for the retail assets, a source told.

However, when bids were opened it “realized rivals had made bids that did not reflect the value of the company” and hence put an offer for the entire company. Other bidders Piramal, Oaktree (US) and SC Lowy (Hong Kong) had complained against Adani’s changed bid.

Adani, in turn, pointed out an “important flaw” stating the administrator put conditions on their offer while inviting fresh bids on November 17, despite the bidding document allowing applicants to revise their offer – thus their bid was in accordance with the processes.

“The committee of creditors (CoC) and administrator are duty-bound to take steps that resulted in value maximization for all stakeholders,” the letter said.

Adani further noted that it had improved its unconditional offer in the final bid including Rs 11,000 crore upfront cash and Rs 19,000 crore payment to lenders with interest; and expressed willingness to “further improve” when revised bids are called.

Reports on November 17 said that Piramal Enterprises asked the CoC to reject Adani Properties’ proposal to bid for DHFL’s entire portfolio or it would withdraw from the process. In a letter written to the RBI-appointed administrator on November 13, Piramal Enterprises strongly protested the move, calling Adani’s proposal to change its bid after the deadline disruptive and vitiated.

Promoters hold about 39.21 percent stake in DHFL. Bankers want promoters’ stake to fall below 10 percent after the stake sale as part of the resolution plan. The CoC was hoping to finalize the resolution plan by November 16 before it could send it to the RBI for review. Last month, the National Company Law Tribunal (NCLT) had allowed 90 days extension for the resolution process till January 5.

You might also like