InvestorQ : What happens to creditors of DHFL if Oaktree buys it for Rs.28,000 crore?
Katherine Gonsalves made post

What happens to creditors of DHFL if Oaktree buys it for Rs.28,000 crore?

rhea Babu answered.
10 months ago

US-based Oaktree Capital has expressed its intent to buy Dewan Housing Finance’s entire book for Rs.28,000 crore. This is yet to be confirmed. Some of the banks that lent to DHFL are keen on selling the book en masse rather than in bits and pieces.

Apart from Oaktree Capital, even Adani Properties and Piramal Enterprises had submitted bids for DHFL. However, the Rs.28,000 crore offered by Oaktree is reported to be the best recovery among the other bidders. Banks would be keen to negotiate a better deal.

The Committee of Creditors or COC is likely to meet on October 26 to hold discussions on the bids. Piramal had quoted a much lower recoverable value of Rs.12,000 crore for the assets of DHFL. Adani had only bid for the SRA property of DHFL.

As of March 2020, DHFL had reported total assets of Rs.79,800 crore, of which nearly 63% of the assets were non-performing assets. The company has a deep relationship with the frauds committed by Rana Kapoor, the erstwhile chairman of Yes Bank.

The large lenders to DHFL include SBI with Rs.10,100 crore exposure, Bank of India with Rs.4125 crore exposure, Canara Bank with Rs.2681 crore, NHB with Rs.2434 crore exposure and Union Bank with Rs.2.378 crore exposure among a slew of other banks. Even the LIC and EPFO may have to write off Rs.10,000 crore.