Billionaire Gautam Adani’s Roads-to-Mining group has indicated that it may improve its takeover bid of Rs 33,000 crore for the collapsed housing lender DHFL and has sought the seizure of deposits from bidders seeking to vitiate the auction by questioning the maximum recovery of public money.
In a written email to the trustee, which is running the insolvent DHFL auction, the Adani Group said that it has followed due process scrupulously and that its “intention has always been to provide an unconditional bid and the maximization of potential value for all stakeholders and at the same time ensuring a rapid completion of the process “.
In the email, uploaded to the DHFL data room and viewed by PTI, the Adani Group said it pained it that some bidders were turning to the media to sensationalize issues in order to avoid maximizing value for lenders. and depositors.
Four entities – Adani Group, Piramal Group, US-based asset management firm Oaktree Capital Management, and SC Lowy – bid for DHFL in October, but the lenders, who are auctioning DHFL to recover unpaid loans, wanted to have suitors review their offers as the original offers were low.
The Adani Group, which had initially bid only for DHFL’s wholesale and Slum Rehabilitation Authority (SRA) portfolio, in the revised bid submitted on November 17 submitted a bid for the full book, offering a total of 30 billion rupees plus an interest of 3,000 crore rupees, a source in syndicates of lenders, said.
This was more than Rs 28,300 crore offered by Oaktree, the source said, adding that the conditional offer from the US company had described that it would retain Rs 1,000 crore in insurance claims.
Piramal traded Rs 23,500 crore for DHFL’s retail portfolio alone, while Hong Kong-based SC Lowy offered Rs 2,350 crore per SRA.
Soon after, rival bidders criticized Adani’s offer, saying the group had submitted the offer after the deadline and that it is unable to expand its original plan.
The three rival bidders sought Adani’s disqualification, the source said.
In the November 22 email, the Adani Group said that it had originally submitted an expression of interest or EoI for Option 1 and 2 (full book and part of portfolio.
It said its October bid was for DHFL’s wholesale assets and SRA only as it was hopeful that together with Piramal Group they would complete the deal (Piramal Group bid only for retail assets).
But at the bid opening on November 9, Adani saw that the bids submitted by his rivals did not reflect the value of the company and decided to bid on the entire book.
Adani has cited 4.2.6 and clauses 7.3 (a) read with Clause 3.15.22 (b) of the bidding process document and said that “the offer is in accordance with the process” and “no resolution applicant has the right to object “.
In addition, the Committee of Creditors (CoC) and the Administrator have an obligation to take measures that result in the maximization of value, he said.
The Adani Group said rival bidders had formed a cartel and the threat of some of them to withdraw from the auction was a “coercive” means of damaging the bidding process.
The bidding process provides that the administrator / CoC “forfeits the earnest of a resolution applicant” who has “participated directly or indirectly in coercive and / or restrictive practices.”
“We reiterate that our intent has always been to provide an unconditional offering and the maximization of potential value for all stakeholders while ensuring a rapid completion of the process,” wrote Adani. “We are also committed to further improving our offering when revised offers are invited.”
A person close to the situation said it was surprising that when Adani submitted a letter on November 12 stating that he would submit an offer for Option 1, then why was the Administrator in his email communication dated November 13 to Would the bidders invite to tender only for the parts that had originally bid?
Even more so when the bidding process clearly states that a bidder can submit a bid at any time. It appears they were unwilling to accept Adani’s offer even though it appeared to be the highest offer, the person said.
Adani also mentioned that some of the bidders have formed a cartel with the aim of restricting full and fair competition in the resolution plan submission process.
According to Clause 7.7 of the bidding process, the lenders and the Administrator have the right to lose the security deposit of said resolution applicants.
Adani’s offer includes cash in advance of Rs 11,000 crore and another Rs 19,000 crore to be paid to lenders with interest of Rs 3,000 crore.
He has also reiterated that his offer is unconditional and unrestricted.
Surprisingly, the admin did not mention Adani’s email at the CoC meeting, but it was then uploaded to the data room.
A credit source said that in the acquisition of Binani Cement, a late offer from Ultratech was not only considered by the lenders but was even confirmed by the Supreme Court.
Kapil Wadhawan, a former DHFL promoter, filed an application with NCLT saying that the Piramal and Oaktree offers do not reflect the true value of the company and that they are trying to get the company for virtually free with minimal investment on their own.
In the email, the Adani Group said its offer was submitted before 10am on November 17 and was in accordance with the bidding document.
It went on to cite the relevant section of the bidding document that gave the administrator freedom to examine the offer received at any stage of the resolution plan submission process and rival bidders had no right to object to such submission.
In November last year, the Reserve Bank referred DHFL, the third-largest mortgage lender, to the National Company Law Court (NCLT) for insolvency proceedings.
In July 2019, the company owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders.
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