Dewan Housing Finance Corp. Ltd’s (DHFL’s) lenders are likely to call for fresh bids for the bankrupt home financier as early as Tuesday after the Adani group unexpectedly offered a higher price for the company’s assets, two people with direct knowledge of the matter said.
The sale process took a dramatic turn on Saturday after Adani Enterprises Ltd made an unsolicited bid for the assets of DHFL after the deadline for submitting revised bids ended on 9 November.
In the revised bids, Piramal Enterprises Ltd offered ₹25,000 crore for DHFL’s retail book, while Oaktree bid ₹31,000 crore for the entire company. Adani had bid around ₹2,700 crore for the wholesale/slum redevelopment authority (SRA) books only.
But, in a sudden move, Adani decided to bid ₹250 crore more than Oaktree for the entire firm. To this, Piramal and Oaktree have objected and the former has written a letter to the creditors of DHFL, including State Bank of India, the people cited above said seeking anonymity.
“Piramal has written to SBI saying that it will take legal recourse if Adani’s bid is accepted. To avoid any legal battle or delay in the sale process, the committee of creditors (CoC) will reopen the stage for final bidding, allowing any bidder to join and place their fresh bids or revise their bids for acquiring DHFL,” said one of the two people. Mint has reviewed a copy of the letter.
The decision of the CoC to reopen the bids for DHFL follows Piramal’s letter to SBI.
This is because as per regulation 36B of the CIRP (corporate insolvency resolution process) Regulations, the administrator may, with the approval of the CoC, re-issue a request for resolution plans. But, this can happen only if the resolution plan received in response to its earlier request are found to be unsatisfactory by the CoC.
In the event of a re-issue of submission plans, all prospective resolution applicants are given equal opportunity to place their revised bids.
“The voting for shortlisting the potential buyer for DHFL will happen next week,” said the first person cited above.
In its letter, Piramal told CoC that it will consider exiting the race if Adani’s offer is recognised unfairly. Piramal, referring to Adani’s revised bid, has stated that an unsolicited offer has been submitted by one of the resolution applicants to SBI and the Committee of Creditors (CoC) after the deadline, in which Adani has offered to revise its resolution plan.
“The submission of such a resolution plan is neither in accordance with the provision of the revised request for resolution plan (RFRP) dated 16 September 2016 nor the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, (CIRP Regulations),” read the letter.
Piramal also said Adani does not meet certain conditions of the RFRP and the submission process, which includes submission of a commitment letter and the earnest money in relation to the group/option for which such resolution plan is being submitted.
DHFL was sent to a bankruptcy court in December 2019. In February, almost two dozen companies showed interest to buy DHFL’s assets.
Later, the bidders revised their offers for the housing company after a forensic audit report by Grant Thornton found a ₹14,500-crore hole in DHFL’s books.
The audit report has been submitted to the NCLT, which has said that there is a ₹9,320-crore hole in the wholesale book, ₹1,707 crore loss in the SRA book and another ₹3,000 crore of fund diversion in the retail loan book.
The recoverability of these loans is in doubt, according to the forensic report.
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