Wadhawan approaches RBI, CoC with revised offer for DHFL

In a letter to RBI Governor Shaktikanta Das, DHFL administrator R. Subramaniakumar and the Committee of Creditors (CoC), the erstwhile promoter of the bankrupt NBFC said that he would make an upfront payment of Rs 9,000 crore in cash and Rs 31,000 crore will be paid within a period of seven years in equal annual instalments with 8.5 per cent per annum interest. 

As per the revised proposal, Rs 12,000 crore will be repaid within a period of seven years in equal annual instalments, following a one-year moratorium with 11 per cent interest after two years of interest moratorium. 

A sum of Rs 18,000 crore will be repaid within a period of five years in equal annual instalments, following a five-year moratorium with 11 per cent per annum interest. 

Further Rs 5,000 crore will be converted to equity, as per the proposal. 

Wadhawan also said that Rs 16,158 crore will be converted into zero coupon bonds and can be appropriately hived off to an Asset Reconstruction Company (ARC) and can be recovered through the ARC in order to preserve the debt-equity ratio of DHFL. 

A portion of the bonds may also be tied to specific projects and also from excess cash flows following the servicing all lenders, based on agreed parameters of thresholds, he said in his letter. 

"The utilisation of cash generation from September 30, 2020 upto the date of the restructuring could also be discussed and agreed upon in keeping with the broad principles above," he said. 

Wadhawan wrote: "You will appreciate that the alternate 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." 

He said that if the alternate proposal is properly considered by the RBI, advisors to the Administrator and CoC, 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. 

"I am also willing for the banks to appoint a professional management and for me to act in the capacity of a consultant to ensure the implementation of the proposal and the complete recovery of  thousands of crores of public money," the letter, also marked to the Prime Minister's Office, and the Ministries of Finance and Corporate Affairs, said. 

The letter comes just ahead of the voting on the bids for DHFL, which is due this week. 

Few days back, Wadhawan wrote to the DHFL administrator and the CoC, assuring to run the NBFC following the best corporate governance standards as decided by the lenders.