The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday has directed the Reserve Bank of India (RBI) appointed administrator of Dewan Housing Finance (DHFL) to put the resolution plan, proposed by its ousted promoter Kapil Wadhawan, to the lenders. As per the tribunal’s oral order, the lenders will have 10 days time to review the plan.
The division bench of a judicial member HP Chaturvedi and a technical member Ravikumar Duraisamy in an oral order directed the administrator of DHFL to table the Kapil Wadhawan’s resolution plan to the Committee of Creditors (CoC) and has adjourned the matter for further hearing to May 31.
“We are not interfering with the commercial wisdom of the lenders and CoC but all we are saying is that they can consider the plan and gave their decision within 10 days,” said the tribunal in its oral order.
During mid-January Billionaire Ajay Piramal won the most contested bankruptcy bid for Dewan Housing Finance Ltd., trumping distressed fund Oaktree Capital and
Capital as creditors overwhelmingly voted for the drug-maker turned real estate and mortgage lender.
Piramal’s bid received about 94% of the votes of the creditors, followed by Oaktree at 45%. Adani Capital obtained about 18%. Lenders/investors have the option to vote for multiple bids.
Later in February, the RBI also approved the resolution plan, submitted by the Piramal group to revive an indebted DHFL.
The central bank appointed administrator filed an application at Mumbai National Company Law Tribunal the resolution seeking approval from the court.
“Kapil Wadhawan has never submitted any formal bid. We cannot consider any three-page letter as anyone’s bid under IBC,” said an executive involved in the matter. “The RBI administrator and lenders are now reviewing the matter as they await the formal written order.”
While another person, involved in the process said, lenders may either challenge the tribunal’s ruling at the National Company Law Appellate Tribunal (NCLAT) call the Committee of Creditors depending on legal provisions. “We need to see what legal provisions are exercised while passing this order,” said another senior executive,” said the first person quoted above.
According to Ashish Pyasi, Associate Partner at law firm Dhir & Dhir Associates, now the promoters have got a chance to get their settlement proposal placed before the committee of creditors for their consideration. “It is possible that committee may compare the offer with approved resolution plan of Piramal Group. If the offer is accepted by the committee at this stage then it will set a new precedent,” said Pyasi.
The Reserve Bank of India had put DHFL under administrator after charges of siphoning off of funds and corruption were filed against the promoter family including the chairman Kapil Wadhawan.
“Had lenders considered Wadhawan as one of the bidders it would have courted many legal troubles,’ said a person whose institution lent to the non-bank entity.
DHFL went bankrupt with more than Rs. 90,000 crores in debt to various lenders including banks, mutual funds and individual investors who kept fixed deposits with the company.
Kapil Wadhawan has offered to repay 100% principal amount to all the creditors. In his revised proposal of Rs 91,158 crore for the creditors, Wadhawan has promised to make an upfront payment of Rs 9000 crore and has also proposed to service Rs 31, 000 crore debt in 7 years at 8.5% per annum.
