Oaktree to take action against debt-ridden DHFL

Oaktree Capital Management is all set to file litigation charges against the debt-ridden Dewan Housing Finance for non-compliance with the stated objectives of the Committee of creditors. As per the news, earlier the primary objective of the Committee of creditors was focused on value maximization from the bids but succeeding the fourth rounds of the bids the lender has been raising other concerns that are not relevant to the principal objective. 

As to work to the resolution plan, the authority to settle all the legal disputes regarding the tendering procedure lies with the Mumbai courts but sources close to Oaktree claim to choose to adjudicate in Singapore but this claim could not have been verified. 

Accordingly ahead of the Committee of creditors meeting Oaktree happened to have meetings with SBI Craps, legal counsel to the RBI appointed administration to discuss the intention, and the multiple other legal and other commercial worries. Many other meetings of Oaktree had even been conducted with Piramal Ventures and Adani to take the matter into consideration under the public domain. Oaktree had raised a bid to set Rs 1500 crore aside in order to meet a tax liability due to a sudden sale of DHFL’s shareholding in Pramerica, holding up a joint enterprise with Prudential. The urgency to use the alternative investment fund of DHLF’s life insurance was also proposed which tends to around 49% foreign ownership. 

If there would be any lawsuit filed by any party in consequence of any default on account of DHFL then Oaktree would be on terms of negotiating the sale price of DHFL. Oaktree and Piramal Enterprises have consequently overtaken Adani Properties in the last round of auctions of DHFL. While Oaktree plans on repaying the fastest and on the other hand Piramal Group has offered to make a huge cash payment of around Rs 12,700 crore single-handedly. 

 

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