DHFL CoC Seeks To Oust Oaktree from Bidding Race; Rules Changed Again To Favour Piramal

IANS 04 January 2021

Economy & Nation

Banking sources reveal that some of the members of the committee of creditors (CoC) with large exposure to DHFL (Dewan Housing Finance Corporation Ltd), are seeking to oust Oaktree from the bidding race for DHFL assets.

Interestingly, Oaktree has emerged as H1 with the highest bid of Rs38,400 crore.

However, at the instance of some of these lenders, the rules of the game are being changed again to favour Piramal group.

The bid evaluation criteria has been altered wrongly whereby Oaktree bid value will unfairly be suppressed by Rs2,700 crore.

The comparison and evaluation of bids circulated to the CoC members for voting purposes had wrongfully removed Oaktree's offers of Rs1,700 crore towards interest income allocated to CoC and Rs1,000 crore towards insurance business, thus presenting Oaktree's bid suppressed by about Rs2,700 crore than what was offered by Oaktree.

This approach is being viewed in sharp contrast to the accommodative stance offered to Piramal's out-of-turn increase in bid by Rs1,700 crore, in contravention of the bidding norms. Piramal was allowed to increase Rs700 crore towards insurance and Rs1,000 crore allocated towards interest income post - IBC (Insolvency and Bankruptcy Code).

Both these parameters have wrongly been removed from the evaluation matrix also providing a significant unfair edge to Piramal.

Some of the CoC members have expressed complete surprise and are understood to have raised concerns regarding the transparency.

Based on the final bids, Oaktree's total bid is higher by Rs1,150 crore on an absolute basis and by at least Rs1,500 crore higher on an NPV basis than Piramal's.

However, the final presentation circulated to the CoC members for voting wrongfully ignored the Rs2,700 crore value allocated by Oaktree whereas the Rs2,000 crore value allocated by Piramal is considered, without providing any clear reasons for such inconsistency in approach.

Some of the CoC members have in private expressed utter astonishment at such omissions and also expressed concerns that the voting will be based on completely wrong and misleading evaluation. Some of them have also raised concerns on the ad hoc manner in which the entire process rules were being changed from time to time to accommodate certain bidders.

Several persons associated with the process have also opined that such experiences will dissuade foreign investors from committing much needed FDI (foreign direct investment) in distressed opportunities in the country.

Oaktree has also in the past raised several concerns that its bid is being misrepresented in the media in a concerted manner.

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

Comments

User

hudafshaikh

4 years ago

Sadly due to the sheer incompetence of the Adminstrator, the DHFL IBC process has failed to comply with legal requirements and is only going to end up a huge legal mess.

NCLT should immediately dismiss the incompetent Administrator and given the shortage of time, should direct the CoC to resort to restructuring of DHFL by converting 1/2 of their debt to equity - and repaying the balance thru' cash or fresh debt securities.

m.prabhu.shankar

4 years ago

Central Government as well as its Institutions are in the hands of Crony Capitalists. Dangerous for the country.

arorasid2711

4 years ago

Another scam while cleaning closet of one scam...

Meenal Mamdani

4 years ago

Indian crony captalism is alive and well as can be seen from this behind the scenes maneuvering. Naturally outside firms do not want to invest in India. Plus they will not forget how India asked Vodafone to pay taxes by changing the rules to apply retroactively.

We thought Modi govt will be more honest than the Congress govt. Not really. Only the favored business houses are different.

r_ashok41

Replied to Meenal Mamdani comment 4 years ago

looks like the coc are being offered for personal gains from them so that to present wrong information to the customers.what more is being hidden from the customers we do not know.This should be cancelled and fresh bids called and the present evaluators taken to task and removed from further action in this connection and subjected to court enquiry

rajoluramam

4 years ago

Bids, COC, ADMINISTRATOR, PERMUTATIONS, COMBINATIONS EXTENSION OF DATES, INCLUDING FAVORITES - - The saga of DFHL is going on incessantly. In the meanwhile, the culprit Mr wadhwan entered the scene and pleading, he should be given a chance to revive the company to the fullest extent, provded he will be given sufficient time. Banks and financial institutions can wait even for a period of one or two decades. Afterall, it is bank's money. But what about individual NCD holders. No sympathy is shown by any body nor GOI. It is a silent spectator, as all these fellows are politically well connected. What happened to the interest and principal instalments collected till now. Definitely, it may be substantial amount. At least, the administrator should release some interest to bond holders. One fear is Government may take a decision to write off bonds like LVB to favour oke tree or piramil. God save us.