RBI gives go-ahead to Piramal Group for DHFL takeover

[NiveRoshni]

RBI gives go-ahead to Piramal Group for DHFL takeover



The Reserve Bank of India (RBI) has given the nod to billionaire Ajay Piramal's Piramal Group for the takeover of the embattled mortgage lender Dewan Housing Finance Corporation (DHFL), a person familiar with the development said, refusing to be identified.

Now, the lenders will take the proposal to the National Company Law Tribunal (NCLT) by next week, the person said. The go-ahead comes almost a month after Piramal Group won the bidding war for the struggling mortgage lender beating competitors that included Oaktree.

"We understand that the RBI has approved the DHFL resolution plan from Piramal Capital and Housing Finance, submitted by the CoC (committee of creditors)," said Piramal Group in a statement.

On January 15, the creditors to the DHFL voted in favour of Piramal as the winning bidder. Piramal Enterprises, a diversified Indian conglomerate, got more than 94 percent votes.

A resolution plan needs a minimum of 66 percent votes to be passed by lenders, who can vote a preference for more than one bidder.

Oaktree, an American asset management company, secured around 45 percent votes, while another bidder, Adani Capital, is believed to have got 18 percent votes.

Oaktree's bid for DHFL was at Rs 38,400 crore against Piramal's Rs 37, 250 crore. Piramal's offer, however, had a higher upfront cash payment and that swung support in its favour.

The Piramal Group's offer translates to around 43 percent recovery for the DHFL lenders. Public sector banks led by State Bank of India and Union Bank are believed to have gone with Piramal, reports have said.

Some of the lenders voted for both Piramal and Oaktree but being a local firm with deep pockets seems to have worked in the favour of Piramal, sources said. Creditors representing around 6.5 percent of votes are said to have abstained.

The bidding war for DHFL had been going on for a while, with the Piramal Group and Oaktree Capital leading the race. The committee of creditors voted on the resolution plan submitted by four suitors.

Source : https://www.moneycontrol.com/news/business/rbi-gives-go-ahead-to-piramal-group-for-dhfl-takeover-6538201.html