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Piramal Housing Finance notifies CCI of proposed combination with DHFL


Piramal Capital & Housing Finance (PCHFL) has notified the Competition Commission of India (CCI) of its proposed bid for Dewan Housing Finance (DHFL) on Wednesday.

The bid was pursuant to its submission to DHFL’s Committee of Creditors (CoC) in response to the ongoing corporate insolvency resolution process (CIRP) against the bankrupt housing financier, PCHFL said in its filing with the CCI.

The move comes in the backdrop of the CoC asking the four main bidders to come up with better bids for DHFL by the end of October.

The bidders included the Adani Group, US-based Oaktree, Hong Kong-based SC Lowy and Piramal Enterprises.

Piramal had made an offer of Rs 12,000 crore for the debt-ridden firm’s retail book while Oaktree offered Rs 20,000 crore for the entire firm.

The Adani Group had bid Rs 3,000 crore for DHFL’s wholesale and Slum Rehabilitation Authority portfolio, valued at Rs 40,000 crore, while SC Lowy’s bid came with too many conditions to be favoured by lenders.

Against admitted liabilities of Rs 95,000 crore, the highest bid, from Oaktree, would require lenders to take a massive Rs 65,000 crore haircut.

The CoC is led by State Bank of India with an exposure of Rs 10,000 crore while the Life Insurance Corporation of India and the Employees’ Provident Fund Organisation also have exposure of similar amounts.

Lenders were unlikely to consider the bids as they were far below the Fair Value and Liquidation Value arrived at by the independent valuers on behalf of the debtors, according to reports.

The Mumbai-based mortgage player had assets totaling Rs 93,000 crore with retail and wholesale assets pegged at Rs 33,000 crore and Rs 48,000 crore, respectively.

PCHFL stated that the proposed combination does not give rise to any competition concerns, regardless of the delineation of the relevant market, according to the filing.

“However, for the sake of completeness, the broad relevant market may be defined as the overall market for provision of loans/ lending services in India,” it added.

In November last year, DHFL became the first finance company to be referred to the National Company Law Tribunal by the Reserve Bank of India.

Before that, the beleaguered firm’s board was superseded by R Subramaniakumar, who was also the resolution professional under the CIRP.

DHFL promoters Kapil and Dheeraj Wadhwan have been in jail since May this year after being arrested by the Enforcement Directorate in relation to the Yes Bank fraud case.

Further, a forensic audit by Grant Thornton found alleged fraud on the part of the Wadhwan brothers by siphoning off funds and creating fake accounts in the housing finance firm’s books.

The diversion of funds has prompted lenders to classify the DHFL account as ‘fraud’.

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