Hungry For Stressed Assets

Private equity and stressed asset funds continue to show interest in acquiring value assets undergoing insolvency proceedings despite delays and litigation

- DIPAK MONDAL

THE BATTLE FOR ACQUIRING Dewan Housing Finance Ltd, the first financial service provider to go through insolvency proceeding, is intensifying with Adani group’s last minute ‘revised’ offer, taking other bidders, also called resolution applicants, by surprise.

While others in the race — Piramal Enterprises and foreign distressed asset firms such as Oaktree Capital and SC Lowy — took umbrage at the last-minute change in Adani group’s offer and threatened to pull out of the bidding process, Adani hit out at them for using the media to prevent maximisation of value for lenders and depositors.

The Adani group has now offered to increase its bid for the loan portfolio of the debt-laden housing loan company to ₹33,000 crore against its earlier offer of ₹31,250 crore. Oaktree Capital, the only other bidder which had offered to buy DHFL’s entire portfolio, wanted to pay ₹31,000 crore.

While other bidders have complained about Adani group jumping the queue and not adhering to requirements laid down by the Request for Resolution Plan regulations, the latter justified its move on the ground that it was offering better value for the assets.

All this is nothing new. Multiple extensions of dates for inviting expressions of interest (EoIs), multiple revisions in resolution plans, last-minute entry of bidders, and endless rounds of litigation are characteristics of the country’s insolvency and bankruptcy regime.

But notwithstanding the uncertainties, PE and distressed asset funds, many of them based overseas, continue to throw their hats in the ring. The pull, of course, is the availability of quality assets at very attractive prices.