Piramal gets RBI nod for DHFL acquisition

Now, the proposed takeover requires the approval of the National Company Law Tribunal.

New Delhi: Piramal Group on Thursday said the Reserve Bank is understood to have cleared the resolution plan for debt-ridden DHFL as approved by the Committee of Creditors (CoC). The CoC had approved a resolution plan submitted by a Piramal Group company, Piramal Capital and Housing Finance Limited, last month.

“We understand that the RBI has approved the DHFL resolution plan from Piramal Capital and Housing Finance, submitted by the CoC,” Piramal Group said in a statement. The resolution plan was approved by the CoC in its 18th meeting concluded on January 15, 2021.

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Now, the proposed takeover requires the approval of the National Company Law Tribunal. The other major contender for the debt-ridden NBFC was US-based Oaktree Capital which secured around 45 per cent of the votes from the lenders in the voting process last month.

The total offer of Piramal was Rs 37,250 crore, compared to Rs 38,400 crore offered by Oaktree. However, Piramal had offered higher upfront cash payment. The total dues of DHFL stand at around Rs 90,000 crore. Piramal, in its bid, has offered an additional amount in the resolution process to fixed deposit holders, over and above what the CoC offers them through the IBC resolution.

Last week, DHFL posted a consolidated net loss of Rs 13,095.38 crore for the third quarter ended December 2020 against a net profit of Rs 934.31 crore in the year-ago quarter. Sequentially, the company witnessed widening of net loss from Rs 2,122.65 crore in the second quarter ended September 2020.

In November 2019, the Reserve Bank referred Dewan Housing Finance Ltd (DHFL), the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings. DHFL was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC. Prior to that, the company’s board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).

The company is being investigated by the Ministry of Corporate Affairs from December 2019 through the Serious Fraud Investigation Office (SFIO). The Enforcement Directorate is also probing the company in connection with loans given by it to certain borrowers. The CBI has also initiated investigation in connection with certain loans granted by the company.

Apart from this, CBI is also investigating into the matter of amounts invested by a Uttar Pradesh State Government entity – Provident Fund in the Fixed Deposits of the company. The financial creditors have claimed outstanding worth Rs 87,031 crore from DHFL.