Lenders to Dewan Housing Finance Corp. Ltd (DHFL) have extended the deadline for bidders to submit revised resolution plans, betting that a potential bidding war among the suitors will help banks extract more value from the assets of the bankrupt home financier.
The decision to seek revised bids till 10 December was taken after Adani Group made a higher unsolicited bid for the entire portfolio last week.
In the voting on Wednesday, the lenders allowed all four suitors to submit revised bids for a part or entire portfolio of the mortgage lender. The committee of creditors (CoC) had taken the legal opinion of former attorney general Mukul Rohtagi in the matter.
“Existing PRAs (prospective resolution applicants) may submit revised and duly executed resolution plans which have improved commercial terms/value over the resolution plans submitted on 17 November in compliance with the terms of RFRP (request for resolution plans) dated 16 September, on or before 10 December,” according to the minutes of the meeting.
In case any of the bidders fail to offer an improved plan before the deadline, the CoC will consider the one submitted on 17 November as the final resolution plan. The lenders also decided that all resolution plans received so far will be opened on 10 December for further evaluation. The CoC made it clear that it will not accept resolution plans submitted thereafter.
Extending the deadline till 10 December also gives more time to the CoC to take into account any decision by the Mumbai bench of the National Company Law Tribunal (NCLT), which is expected to hear the National Housing Bank’s challenge to the resolution process on 3 December. NCLT had ordered a stay on all resolution plans after the National Housing Bank asserted its right to receive proceeds from the resolution process over other lenders.
The sale process took a dramatic turn last week after Adani Enterprises Ltd unexpectedly offered a higher price for the assets of DHFL after the 9 November deadline for submitting revised bids ended. All the other bidders, including Oaktree Capital, Piramal Enterprises and SC Lowy, objected to Adani’s bid.
Lenders, who were initially of the view that Adani’s offer should not be considered, changed their stance after they received legal opinion that the CoC can call for revised bids to ensure value maximization of assets. “Clause 39.1 of the RFRP provides that the CoC may extend the resolution plan submission date with the objective of maximizing the value of the company and balance interests of all stakeholders, subject to providing due notice of such extension to the resolution applicant by email,” it said.
In bids received on 17 November, Piramal Enterprises Ltd offered ₹25,000 crore for DHFL’s retail book, while Oaktree bid ₹31,000 crore for the entire company. Adani bid around ₹2,700 crore for the wholesale/slum redevelopment authority (SRA) books but later decided to offer ₹250 crore more than Oaktree’s bid for the entire firm.
