Piramal Group claims its bid for DHFL highest and compliant

Piramal Enterprises on Friday claimed that its bid for resolution of debt-ridden mortgage lender DHFL is highest and fully compliant with regulatory norms.

Since the conclusion of the fifth and final round of the bidding process last month, Piramal Enterprises and the US-based Oaktree Capital are claiming that their bids are the highest and fully implementable.

According to sources, suitors have submitted bids in the range of Rs 35,000-37,000 crore.

The Committee of Creditors (CoC) are examining each bid in detail including qualitative and quantitative parameters and it is expected to take a call on January 14.

"The Piramal bid for DHFL offers lenders the highest upfront cash recovery, has the highest score on the CoC evaluation matrix, is fully compliant with all regulatory norms, and is fully and immediately implementable," the company said in a statement.

"We have full faith that the committee of creditors, comprising some of the most reputed financial institutions of our country will make the fair and just choice in the voting process," it said.

Earlier this week, Oaktree also claimed that its revised bid for DHFL is unconditional and comes with a commitment of fresh capital infusion of Rs 1,000 crore for the revival of the company.

According to sources, Oaktree in a letter dated January 6 to members of the CoC and administrator of DHFL said the resolution plan offers a clean structure for all stakeholders.

Contesting capital infusion claim, Piramal Enterprises said Oaktree has offered a mere Rs 1 lakh as committed equity and proposes to invest Rs 1,000 crore by way of equity or debt while Piramal's plan commits Rs 3,8000 crore of equity.

In addition, it said, it has Rs 16,000 crore of equity in its financial services business available for DHFL, and another Rs 10,000 crore at the Piramal Enterprises level ready to be infused as necessary.

With regard to the life insurance subsidiary of DHFL, it said, there is no specific plan or implementable solution spelt out for the business by Oaktree.

Besides, the US-based company has not specified the name of Indian-owned and controlled Alternative Investment Fund (AIF) for taking over the insurer.

The statement also alleged that an additional interest income offer of Rs 1,700 crore made by Oaktree post the cut-off date of December 22, 2020 is patently illegal.

"It is important to note that in the final bid, Piramal has also offered Rs 1,000 crore as interest income, which is also not being considered for scoring purposes," it added.

In November 2019, the Reserve Bank referred Dewan Housing Finance Limited (DHFL), the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings.

DHFL was the first finance company to be referred to the NCLT by RBI using special powers under Section 227 of the IBC.

Prior to that, the company's board was superseded and R Subramaniakumar was appointed as the administrator.

He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).

As of July 2019, the company owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders.

Image used for representation purpose only.

Photograph: Reuters