Lenders to Dewan Housing Finance Corp. Ltd (DHFL) are likely to seek fresh bids for the bankrupt mortgage lender, and its committee of creditors (CoC) is expected to vote on Wednesday to decide on this matter, five people aware of the development said.
The decision by the lenders to start the bidding process all over again comes after the Adani group’s unsolicited offer last week to buy the entire company instead of the select assets it had bid on earlier, the people said on condition of anonymity.
A revised bidding process is expected to realize higher value for banks who currently stand to take significant haircuts on exposures to the lender.
“The lenders have informally agreed to allow revised bids and the voting process is expected to seal the decision as none of the lenders appear averse,” said one of the five people cited above. Alongside, lenders are also expected to deliberate on whether to also allow new bidders in the fresh round of bidding, the second person aware of the development said.
Mint was the first to report on 20 November that State Bank of India (SBI), the lead lender, had asked fellow lenders to persuade all four suitors to the firm to upgrade their offers as an improvement in the asset quality of DHFL has made it more valuable.
The four suitors are Adani, Oaktree Capital, Piramal Group and SC Lowy.
“The CoC has decided to go for value maximization by opening the bidding process to existing investors who can now participate in any bucket,” said the first person aware of the matter.
However, the CoC cannot vote on a resolution until the Mumbai bench of the National Company Law Tribunal (NCLT), which had ordered for a stay on the resolution, hears the matter on 3 December. The order came after the National Housing Bank asserted its right to receive proceeds from the ongoing corporate insolvency resolution process (CIRP) on a preferential basis as per the Act governing it.
“The CoC is in a Catch-22 situation. By not considering the Adani bid, we might be questioned for not considering a higher value. By considering an unsolicited bid, we will be upsetting the other bidders,” said the head of a public sector bank.
To be sure, DHFL’s CoC met last Tuesday to discuss ways to deal with the issues involving the offers made by the four bidders.
