Grapevine: Deutsche Bank pulls out of DHFL bidding; JM Baxi may raise CPPIB funds

By Ankit Agarwal

  • 12 Mar 2020
Credit: VCCircle

German lender Deutsche Bank has backed out from bidding for embattled Dewan Housing Finance Corp. Ltd, citing clash of interests, two persons familiar with the development told The Economic Times, leaving 23 suitors in the fray for DHFL.

Deutsche Bank had been lapping up junk bonds of DHFL on behalf of its offshore clients and may still have some of them on its books.

In December last year, Deutsche Bank bought DHFL bonds worth Rs 20 crore at a deep discount of nearly 80%. The distressed asset situations expert either keeps it on its books or passes it on to offshore clients.

The remaining potential buyers include Adani Group, KKR, Warburg Pincus, Asset Reconstruction Company (India) Ltd, Welspun Group, Edelweiss, Kotak Mahindra Bank-led Phoenix ARC, Varde Partners, SC Lowy, and Oaktree Capital. They had put in non-binding initial bids either to purchase the entire business or to buy specific portfolios.

Meanwhile, Mumbai-based logistics firm JM Baxi might raise Rs 1,400 crore (about $190 million at current exchange rate) from the Canada Pension Plan Investment Board (CPPIB) against 35% stake in its Delhi-based subsidiary, International Cargo Terminals and Rail Infrastructure Pvt. Ltd, three people aware of discussions told Mint.

The deal is likely to close in early April, one of the persons said. “Part of the proceeds will be used to retire the Piramal debt," said another of the three persons cited above. In 2017, the group had raised Rs 530 crore from Piramal Capital, the report said.

In another development, Housing Development Finance Corp. Ltd (HDFC) and automobile financier Kotak Mahindra Prime Ltd might each put Rs 2,000 crore ($270 million at current exchange rate) along with State Bank of India’s Rs 2,450 crore ($330 million) in moratorium-hit Yes Bank Ltd, according to a draft rescue plan.

This was reported by a Mint report citing persons in the know.

“HDFC, along with four to five other banks and NBFCs (non-banking financial companies), has proposed to invest in the equity of Yes Bank,” one of the persons said.

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