Oaktree Capital, one of the vital bidders for troubled mortgage firm DHFL, has alleged, that inspite of it offering maximum value to stakeholders, there’s a consistent crusade to misrepresent information approximately its tender.
The firm shot-off a letter to Reserve Bank of India (RBI) on Sunday, ahead of voting by lenders on bids which begins this week. Oaktree and Piramal group are in near race to receive keep watch over over DHFL. The Adani group may be in fray.
Oaktree said information is being presented in an incomplete and inaccurate manner to discredit its tender. The Oaktree letter confirms that it did not give its last tender on December 22 — the final date of offering last plans — and did so only after Piramal submitted its plans. “It used to be only after Piramal offer used to be made to CoC, Oaktree raised its offer by Rs 1,700 crore. But, Piramal is offering more money upfront,” said a source near to the development. Interestingly, both offers supply zero value to shareholders of DHFL.
It claimed the fairness infusion by Second Highest Bidder is uncommitted. It said that the Second Highest Bidder has sounded out on making a fresh capital infusion of Rs 3,800 crore to give a boost to operations in the first 12 months post-implementation of the resolution plan.
This is without a binding commitment or a firm commitment letter, it claimed.
Oaktree has, alternatively, dedicated to providing a fresh capital infusion of Rs 1,000 crore as a cushion to DHFL lenders, by the use of a firm commitment letter, it claimed.
DHFL is undergoing the Corporate Insolvency Resolution Process (CIRP), and is currently being managed by an administrator who is being assisted by an advisory committee in discharging duties. Both the advisor and the committee were appointed by RBI.
All of the lenders have made substantial provisions for their exposure to DHFL. This is the first case of a finance company being taken under Insolvency and Bankruptcy Code (IBC) and the Reserve Bank of India is eager to see an effective resolution in this case.
Piramal hits back at Oaktree
A Piramal official spokesman hit back at Oaktree (OT) saying america company is floating imaginary conspiracy theories which do not alter apparent facts.
“All of the bidders had the possibility to submit bids post clarifications on December 22. After seeing our tender, and recognizing that their tender falls short on quite a lot of dimensions, OT is now sending this series of letters, to alter the substantive submissions they themselves have formally made,” it said.
Piramal said the OT tender is short on upfront cash, short on NPV, short on overall score, un-implementable because of insurance related complications, and leaves lenders with weak debt paper because of the sub debt constitution offered by OT to themselves.
“The Piramal plan merges DHFL with a AA rated entity, offers Rs 10,000 Crore of fairness immediately, and provides clarity on quality and secondary market valuation of NCDs. The alternative plan is a highly leveraged constitution with minimal fairness,” it said.
This mail from the applicant seems to be under the fallacious belief that threatening CoC members with consequences is going to alter these facts and change the class lesson of a legally run, translucent process in our country, the spokesperson said.
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