According to the sources, following the results of the initial due diligence, DHFL's talks with AION may hit a roadblock. In any case, a deal is still far away. When contacted AION spokesperson declined to comment, stating “we don’t react to market speculation”. A DHFL
spokesperson also declined to comment.
AION has been undertaking due diligence on DHFL
which is primarily focused on taking over its healthy retail loan portfolio which stands at Rs 37,000 crore after the housing company sold loans about Rs 41,000 crore to banks to meet its debt obligations.
However, according to the sources, the structuring of the deal could take various routes — DHFL could demerge its retail loan portfolio and sell it to a strategic investor like AION. If that is not possible, a strategic investor could pick up equity in DHFL, which would dilute the promoters' stake, and then sell other parts of the business, keeping the retail loan portfolio.
The firm has a wholesale loan portfolio, valued at Rs 30,000 crore; it has been in talks with Oaktree Capital to sell the portfolio. Apart from AION, Cerberus Capital — also a distressed asset private equity fund — has shown interest in DHFL. The promoters of the company, the Wadhawans, are ready to dilute their stake, which is currently at 39.2 per cent, so that strategic investors get joint or majority control.
However, the company is looking at rustling up Rs 7,000 crore-Rs 8,000 crore from the deal, which assumes a huge premium on the traded price of the shares. The lenders of DHFL recently signed an inter-creditor agreement and have given DHFL seven days to prepare a resolution plan, which was discussed on Monday.
Under the resolution plan, DHFL will ask for a fresh line of credit of Rs 1,300 crore-Rs 1,500 crore every month to start fresh loans. It will seek extension in its loan book between eight months and three years. The firm reported a standalone net loss of Rs 2,233 crore in Q1FY19.