Kapil Wadhawan, the erstwhile promoter of Dewan Housing Finance Corporation Ltd (DHFL), has urged the Reserve Bank of India, the Administrator and lenders of the debt-ridden mortgage financier to properly consider his settlement proposal, which he contends is better than the bids submitted as part of the resolution process until now.
His latest letter on December 29 comes at a time when voting on the resolution plans has already begun with fierce competition amidst at least two bidders – Oaktree Capital and Piramal Capital and Housing Finance Ltd. Adani and SC Lowy, too, are in the race. Pointing to the bidding war between Oaktree and Piramal, Wadhawan in his letter has noted that there is a possibility of a potential litigation amongst the bidders.
“…despite such prejudicial contingencies, it is unfortunate that my settlement proposal does not seem to have been given any consideration whatsoever, though I am offering significantly more value than any of the current bidders – even more than the recent increase by Piramal,” Wadhawan said in the letter addressed to RBI Governor Shaktikanta Das, DHFL’s Administrator R Subramaniakumar and the Committee of Creditors.
Resolution plans by both Oaktree and Piramal amount to over ₹38,000 crore and lenders will look at various evaluation metrics for bidding.
Better than other bids
“You will appreciate that the alternative proposal that I have now made is significantly better than the bids made by any of the bidders by a wide margin. It is apparent that the bidders are offering no real value for the wholesale book and are seeking to retain for themselves the profits that they will earn through further retail lending,” Wadhawan further said. His revised offer also has a total value of ₹91,158 crore and provides for full repayment of the principal to all the creditors. Amongst other provisions, it includes ₹31,000 crore to be paid within a period of seven years in equal annual instalments with 8.5 per cent per annum interest.
“…it will be apparent to all that not only is the proposal fully implementable but is also in the best interest of all the creditors, and will ensure the recovery of thousands of crores of public money,” he further said.
Under the proposal, with the conversion of a part of the debt to equity, banks will be the majority shareholders of DHFL and Wadhawan said he is willing for them to appoint a professional management and for him to act in the capacity of a consultant.