In September, DHFL had proposed a resolution plan that converted debt to equity, following which lenders would acquire 51 per cent of the company.
Bankers expect the resolution of debt-ridden mortgage lender DHFL to be finalised by the end of next month, according to a banker who is part of lenders’ consortium. The Inter-Creditor Agreement (ICA) is in place for the resolution of the account and banks are looking at it, the senior banker said. The resolution would be reached by December 31, the banker expressed hope amidst SFIO probe of alleged financial irregularities committed by DHFL. Asked if the NCLT route could be taken for resolution, the banker said that all aspects are being examined, it is pre-mature to comment at the moment.
According to the Reserve Bank’s June 7 NPA resolution framework, for a resolution plan to be passed, 75 per cent of lenders by value and 60 per cent by numbers must approve it and sign the ICA.
The banker also said that mutual funds as a category of debtors are still not on the same page. In September, DHFL had proposed a resolution plan that converted debt to equity, following which lenders would acquire 51 per cent of the company. It also sought a Rs 15,000-crore lifeline from the lenders as they finalise the resolution plan.
The resolution plan offered by DHFL proposed to convert 2.3 per cent of each lender’s exposure into equity at Rs 54 per share. The beleaguered home financier owes Rs 83,873 crore as of July 6, 2019 to banks, the National Housing Board, mutual funds and bondholders, including retail bondholders. The company has been facing liquidity issues since last September and yet has paid back Rs 41,000 crore of its financial obligations through a combination of securitization of assets and repayment collections.
The Wadhawan family, who owns a little over 39 per cent in the company, has been looking at various ways to come out of the stress which first came to light late last year following the IL&FS bankruptcy. These include selling stakes in group entities, including in the flagship to the extent of giving up management control. Earlier this week, the government has ordered an SFIO probe into alleged financial irregularities at mortgage lender DHFL after finding instances of suspected fund diversions.
DHFL came under the scanner in the wake of allegations that the company had siphoned off Rs 31,000 crore worth bank loans through layers of shell entities. The Ministry of Corporate Affairs carried out a detailed examination of the allegations of financial misdoings against the company’s promoters through the Registrar of Companies (RoC).
The RoC report indicated suspected fund diversions at the company, following which the ministry has asked the Serious Fraud Investigation Office (SFIO) to probe the case, as per the source.