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Adani Group, KKR, Warburg & Oaktree bid to buy DHFL

The interested investors will then conduct a due-diligence on its books.

, ET Bureau|
Last Updated: Feb 18, 2020, 07.48 AM IST
Banks have a total exposure of Rs 47,000 crore to DHFL, including non-convertible debentures.
Mumbai: About two-dozen potential buyers, including the Adani Group, KKR, Warburg Pincus and Oaktree Capital, on Monday put in nonbinding initial bids to purchase troubled mortgage lender Dewan Housing Finance (DHFL), two people aware of the matter told ET.

While the Adani Group, Oaktree Capital, asset reconstruction company ARCIL, KKR India and Welspun Group bid to buy the entire business, Edelweiss, Kotak Mahindra Bankled Phoenix ARC, and distressed asset funds Varde Partners and SC Lowy have shown interest to buy specific portfolios.

The DHFL administrator sought bids in two categories. Under the first option, companies bid to buy the entire business of DHFL while in the second category, they could choose from the retail, wholesale and slumrehabilitation portfolios.

“We have received strong interest in DHFL’s assets, our objective is to shortlist a suitor which would run the company as a going concern,” said an official involved in the bid process. “We are looking at several criteria including the financial health, strong network, best fit, terms of repayment and value maximisation.”

DHFL is the first financial services company to be admitted to the bankruptcy courts after the Reserve Bank of India (RBI) superseded its board and appointed former Indian Overseas Bank chief, R Subramaniakumar, to resolve the Rs 85,000-crore debt.

Now, the administrator and DHFL’s advisor EY will shortlist bidders based on the eligibility criteria, after which they would be given access to the balance sheet and books of the troubled non-bank lender. The interested investors will then conduct a due-diligence on its books.

Erstwhile promoter of DHFL, Kapil Wadhawan, is currently under arrest on allegations of money laundering, which is linked to the alleged proceeds of crime of the deceased gangster Iqbal Mirchi. A recent Enforcement Directorate probe also alleged that Wadhawan siphoned off Rs 12,700 crore through 79 shadow companies and one lakh fictitious accounts.

DHFL, burdened with debt of at least Rs 1 lakh crore, started facing redemption pressure soon after Infrastructure Leasing & Financial Services (IL&FS) defaulted on payments in 2018. DHFL’s project loans amount to Rs 35,078 crore, while its funding of Slum Rehabilitation Authority projects stands at Rs 11,967 crore. Banks have a total exposure of Rs 47,000 crore to DHFL, including non-convertible debentures.

State Bank of India has an exposure of about Rs 10,000 crore to DHFL. Other state-owned lenders to DHFL include Bank of India, Canara Bank and Punjab National Bank. Union Bank of India leads the consortium of lenders while the steering committee includes nominees from the SBI, Syndicate Bank and Canara Bank.

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