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Tribunal asks DHFL administrator to table ex-promoter’s offer before lenders
Photo Credit: Reuters

The bankruptcy tribunal today asked the administrator of Dewan Housing Finance Corporation Ltd (DHFL) to table a settlement offer from former promoter Kapil Wadhawan before lenders in 10 days, two people told VCCircle

The tribunal will now hear the matter on May 31. In January this year, Piramal Group had emerged as the preferred bidder with its offer of about Rs 35,500 crore beating American asset manager Oaktree Capital’s bid of around Rs 36,700 crore. With more upfront cash and other conditions, Piramal scored over the foreign distressed fund. 

Under Piramal’s resolution plan, lenders are taking a haircut of around 57%. 

Currently lodged in Mumbai’s Taloja jail, Wadhawan said that the bids were “abysmally low” and that attempts were made by “outside forces” to depress the true value of the assets. 

Wadhawan had pegged the total estimated profit from about 10 projects of DHFL at close to Rs 44,000 crore. 

Last year in October, he had first proposed a settlement offer to make 100% repayment to all creditors within seven to eight years starting 2022, with an upfront payment of Rs 9,000 crore. This was rejected. 

Two months later, in a letter to the administrator, Wadhawan reiterated his offer. He also vowed to facilitate completion of stalled projects to pay dues to borrowers in the wholesale business and stated his plans to focus on retail loans. 

The Piramal offer received an approval from the Reserve Bank of India (RBI) in February. 

DHFL

Once one of India's top non-banking finance companies, DHFL owes its creditors -- which include mutual funds, banks, pension funds, insurance firms and retail investors -- close to Rs 1 trillion ($13.93 billion). 

The verified claims of financial creditors before the tribunal as on August 2020 stood at nearly Rs 87,000 crore. 

DHFL was one of the first financial companies to enter bankruptcy in November 2019

In September last year, DHFL’s administrator had first filed a case of fraud worth Rs 12,705 crore ($1.7 billion) against the promoters. 

Around the same time, company promoters Kapil and Dheeraj Wadhawan came under the scanner of the Enforcement Directorate for alleged links between a firm associated with DHFL and Iqbal Mirchi, the late gangster. 

More fraud was uncovered in February this year too. 

Also read: All eyes on lenders’ tough choice of DHFL suitor as bankruptcy law faces acid test

Also hear: Podcast - Making sense of the bidding war for Dewan Housing’s assets

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