For the beleaguered mortgage lender, Dewan Housing Finance Corporation (DHFL), Piramal Group has appeared as a preferred bidder at the end of voting by the Committee of Creditors (CoC) as on 15th January 2021. The bid received almost 94% votes in favour of Ajay Piramal, Chairman Piramal Group, followed by Oaktree at 45%. Adani Capital captured 18%.
The bidding war has been going on since months with Piramal Group and Oaktree Capital being at the head of the race in the final round. Piramal Enterprises is an Indian expanded conglomerate, whereas, Oaktree is an American asset management company. They both made bids in the range of Rs 37,000 – 38,000 crore. The cash components have been almost identical, at approximately Rs 17,000 crore each.
Throughout the entire process of bidding, the Piramals maintained their stance that the bid had an upper hand over Oaktree due to various reasons.
Apart from the financial part, creditors evaluated the non-financial aspect such as regulatory compliance, company track records and future action plan and so on. This was said by officials who are aware of the matter.
Moneycontrol earlier reported that Piramal appears to have a clear edge over Oaktree.
DHFL broke under the weight of an extreme liquidity crunch after the collapse of Infrastructure Leasing & Financial Services (IL&FS) in late 2018. They consequently couldn’t recover from the low point and became bankrupt.
Lamenting further, investigations were launched against the Wadhawans on different charges related to financial irregularities and shocking nexus with the underworld regarding particular real estate transactions. DHFL was pushed to the National Company Law Tribunal (NCLT) in December 2019. After that, the creditors to the company have attempted for a resolution.
DHFL is obliged to pay around Rs 91,000 crore to its creditors. State Bank of India is the biggest creditor with an exposure of Rs 10,000 crore. Some other lenders include Bank of India, Canara Bank, NHB, Union Bank of India, Syndicate Bank, and Bank of Baroda.