Piramal, Oaktree up recovery pitch to DHFL lenders

Mumbai: The Piramal Group and Oaktree Capital Thursday indicated in clarifications to the lenders of Dewan Housing Finance (DHFL) that their respective offers to own the troubled mortgage financier would ultimately ensure higher recoveries than estimated earlier.Piramal Group told lenders that the value of the insurance company would be higher than earlier estimates. Separately, the US-based Oaktree promised an additional ₹1,700 crore of interest income that is expected to accrue in the period beginning from the approval of the resolution plan to its effective date.To be sure, the Oaktree proposal is not a revised offer but an anticipated increase in sums that lenders will likely receive, subject to repayments from DHFL’s existing customers.Now, the net present value (NPV) of the total recovery for lenders is pegged at ₹36,410 crore from Oaktree, compared with around ₹35,000 crore offered by the Piramal Group.The committee of creditors met Thursday to analyse the resolution plans submitted by three bidders — Oaktree, Piramal and the Adani Group.“Oaktree is in front after today’s offer. It has closed the gap on the cash upfront, matched Piramal on the latest inclusion of interest and also put more on the table for fixed-deposit holders. These new developments mean that voting is unlikely anytime soon,” said a person who is part of the negotiations.Lenders were otherwise seeking to put the proposals up for voting next week. Now, the voting process could well extend to the second week of January across the spectrum of lenders, bondholders and depositors.The meeting of the committee of creditors continued until late on Thursday.“In an effort not to gain an unfair advantage, we have allocated an amount of additional interest income to financial creditors equal to total increase offered by the second highest bidder for the additional interest income and the insurance stake, so that the bids may once again be compared on a consistent basis,” Oaktree said in a letter.Oaktree is offering upfront cash of ₹17,100 crore plus additional ₹300 crore cash for the accounts of fixed-deposit holders.“We believe DHFL’s post-Oaktree implementation plan would receive the AAA rating given its 100% retail focus, superior ALM (Asset Liability Management) profile versus peers and ample capital adequacy,” Oaktree said.Its inclusion of the ₹1,700 crore interest garnered came after Piramal included the interest earned by DHFL after the NCLT order, but before the resolution plan was implemented, as part of its offer.“Oaktree has upped its offer after Piramal did so earlier this week and following CoC’s clarification whether Oaktree could make the interest earned by DHFL after the NCLT order as part of the plan,” said a person familiar with the negotiations.“With this offer, Oaktree has maintained its lead over the Piramal offer on an aggregate basis with a total offer of ₹38,400 crore compared with Piramal’s ₹37,250 crore,” the person said.Earlier on Monday, billionaire Ajay Piramal sought clear deadlines to push banks to start voting on the resolution plans for DHFL, underscoring the attractiveness of his offer to help maximise recoveries for the affected financiers to the troubled mortgage lender.

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