Piramal Enterprises has won the race to acquire the troubled mortgage lender Dewan Housing Finance Ltd (DHFL) with its offer getting more than 90 per cent of creditors’ support as voting for the resolution process ended on Friday.
Piramal’s plan received support from 94 per cent of the lenders by value compared with around 45 per cent secured by Oaktree Capital. The lenders had three choices while voting on the resolution plans: Piramals, Oaktree or both. And that is why the sum of the votes exceeds 100 per cent, sources said.
Though a formal announcement is awaited, observers say the bids for the acquisition of DHFL may not be over as Oaktree Capital has said it will take legal action if its proposal is not approved.
The race for DHFL was largely between Piramal and the US-based asset management firm. Both firms have been claiming that their offer is better than the other. Voting for the resolution plans ended late Friday evening.
The lenders will meet next week and issue a letter of intent to the Piramal group. They are also expected to submit Piramal’s plan to the National Company Law Tribunal (NCLT) for approval.
If the Piramal group succeeds in acquiring DHFL, it may merge Piramal Capital & Housing Finance with the mortgage lender.
The Piramal group had offered Rs 37,250 crore for DHFL, of which it proposes to make an upfront payment of Rs 17,250 crore, apart from Rs 150 crore for fixed deposit holders and over Rs 19,000 crore through debentures.
Oaktree Capital had offered Rs 38,400 crore, including an upfront payment of Rs 17,100 crore and Rs 300 crore to fixed deposit holders. It also proposed to pay Rs 21,000 crore by debentures. Last Saturday, Piramal had claimed that its bid was better than Oaktree’s.
“SThe payment structure offered by Oaktree is complex. The bidder has promised to pay this amount out of any proceeds they get from selling DHFL’s insurance subsidiary. Since Oaktree is a foreign institution, they face severe legal challenges in owning and selling the insurance unit, which is at the maximum permissible foreign ownership limit of 49 per cent,” it said.
