With DHFL resolution process entering the final stage, Piramal Enterprises on Saturday claimed that its bid provides better offer to over 55,000 retail fixed deposit holders of the debt-ridden mortgage lender than the one made by other suitor US-based Oaktree Capital.
In the last round of bidding, Oaktree has made a similar offer as well, and has claimed that they will give Rs 300 crore extra to FD holders, compared to the Rs 150 crore promised by Piramal so far.
“However, the payment structure offered by Oaktree is complex. The bidder has promised to pay this amount out of any proceeds they get from selling DHFL’s insurance subsidiary that is clubbed in the sale. Since Oaktree is a foreign institution, they face severe legal challenges in owning and selling the insurance business which is already at the maximum permissible foreign ownership limit of 49 per cent,” Piramal said in a statement.
Hence Oaktree’s offer to pay extra sum to FD holders out of the linked sale proceeds of the insurance company is highly uncertain, it said adding that Piramal in contrast has offered to pay Rs 150 crore extra to FD holders upfront in the form of cash.
This has been acknowledged by the Administrator and his advisors at SBI Capital Markets as well, in their evaluation of the two bids, as they have ascribed a value of Rs 150 crore to the Piramal offer for FD holders, and nil value to the offer from Oaktree Capital in their rating parameter to evaluate the bids, it said.
Over 55,000 retail customers and institutions hold Rs 5,400 crore of fixed deposits in DHFL.
“We have explicitly stated in our bid that in addition to whatever consideration the committee of creditors decides to offer the fixed deposit holders, we will top it up by another 10 per cent. While this doesn’t give us any points, it is an attempt to share in the pain of those most affected by the decline of this franchise,” Piramal Enterprises said.
An integral part of Piramal’s DNA is the importance that it place on the social contribution each businesses make, it said, adding, DHFL has over 75,000 retail fixed deposit holders, most of them from humble backgrounds who have invested their hard earned savings into small deposits here.
Since the conclusion of the fifth and final round of the bidding process last month, Piramal Enterprises and the US-based Oaktree Capital are claiming that their bids are the highest and fully implementable.
According to sources, suitors have submitted bids in the range of Rs 35,000-37,000 crore.
The Committee of Creditors (CoC) are examining each bid in detail including qualitative and quantitative parameters and it is expected to take a call on January 14.
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