DHFL resolution: Balloting on four final bids deferred

MUMBAI: Balloting on four final bids to decide the new owner of the debt-laden Dewan Housing Finance was deferred Tuesday after a city court halted the exercise, probably to ascertain the views of the then industry regulator and refinancier - National Housing Bank (NHB) - that had invoked regulatory provisions to seek a bigger share of the resolution proceeds.

The four final bids for DHFL, submitted by Oaktree, Piramal Group, Adani Capital and SC Lowy, were to be put to vote Tuesday. Oaktree, Piramal and SC lowy had earlier in the day submitted revised bids after Adani put up a surprise offer for the whole company in a dramatic late entry late last week. DHFL is the first financial company in India to be put through a revamped administration framework.

The committee of creditors has postponed a decision on the winner to December 3, according to the court direction, three people with knowledge of the matter told ET. The final revised bids would be opened on the date of voting. The court order has not yet been made public. NHB, the erstwhile regulator for home financiers, was represented in court by solicitor general Tushar Mehta in a virtual hearing.


"NHB has asked for a higher share in the resolution citing its regulatory position according to the NHB Act,” said a person involved in the debt resolution exercise. The court has stayed any voting or distribution of the proceeds until December 3.

"We have no choice but to go with what the court says," said the person cited above.

This means the resolution of Rs 88,000 crore soured debt is now delayed as lenders cannot move without the court order. Consultations will likely continue.

"We will go ahead and ascertain the valuations in the next few days," said the person cited above.

Since the third week of October, the lenders have been negotiating as they seek the highest possible recoveries from the home financier, which had borrowed about Rs 88,000 crore from banks, institutions and retail individuals.

DHFL and NHB did not reply to ET’s query.

At the same time, institutional lenders mostly objected to Adani’s late offer to own the whole company, said a source, who attended the digital meeting. The non-banking arm of billionaire Gautam Adani had proposed to pay about Rs 250 crore higher than the offer of Oaktree at Rs 31,000 crore to own the whole company. Adani’s proposal came with some conditions, sources said.

The RBI-appointed administrator of the home financier last week sought revised bids from all applicants for the third time, but within the existing asset categories. The committee of creditors is also working on a dedicated recovery plan for individuals, who invested up to Rs 7 lakh in DHFL fixed deposits or debentures.

“There are some lenders who are calling Adani's new bid a disruptive one because it came after the deadline,” said a senior banker.

Piramal proposed to pay about Rs 23,000 crore, excluding interest on retail loans accrued during the lockdown/insolvency period. It aims to buy the retail assets from DHFL. Adani Capital and SC Lowy were keen in acquiring the loans given to institutions and slum rehabilitation projects. Later, Adani expressed interest for the whole company.

The deadline to approach NCLT is January 1.

“Voting will be open for a few days at least. We are running out of time since we need an RBI approval before going to the NCLT for its approval,” said a senior executive. RBI needs at least 45 days to process the plan.