Piramal Capital & Housing Finance has initiated the sale of Rs 5,546 crs of bad loan portfolio inherited from Dewan Housing Finance (DHFL) with the purchase price in the bidding bid set at a 46% recovery threshold of Rs 2,550 crs.
There will be a Swiss Challenge to anchor bid from JM Financial Asset Reconstruction Co (JM Financial ARC). Piramal has asked interested bidders to submit expressions of interest where the offer amount is a mark-up of atleast 10% to the base offer of Rs 2,550 crore. The bids can be made in all cash basis or cash-plus-security receipts basis, where 15% of the bid amount will be paid in cash and the remaining in security receipts. Security receipts are quasi debt instruments which are redeemed when the ARC recovers the underlying debt.
Piramal has received and overall purchase consideration of Rs 2,550 crore which includes 15% cash payment and 85% in security receipts. The receipts will be subscribed by Piramal Capital or its affiliates. Piramal has been selling bad loans to clean up the stressed book of DHFL having acquired the distressed mortgage lender in a bankruptcy auction.
