Lower bankruptcy court asked lenders to consider Kapil Wadhawan’s settlement offer
The administrator for Dewan Housing Finance Corporation (DHFL) has moved the National Company Law Appellate Tribunal (NCLAT) against the lower bankruptcy court’s order asking lenders to consider Kapil Wadhawan’s settlement offer. Sources close to development have told FE that the administrator has requested the appellate tribunal to set aside the May 19 order of the Mumbai bench of the National Company Law Tribunal (NCLT). The appeal by DHFL administrator is, however, yet to be admitted by the NCLAT.
“We had to move NCLAT as this is a test case and tomorrow any promoter will quote the DHFL case and file a case against the lenders,” said one official involved in the matter. DHFL is seen as a test case under the Insolvency and Bankruptcy Code (IBC), as it was first NBFC to be referred to NCLT in 2019.
NCLT had earlier directed DHFL’s administrator to present the settlement offer of the non-banking financial company’s ousted promoter Kapil Wadhawan before the creditors for their consideration. The tribunal had asked the RBI-appointed administrator of DHFL to present the settlement plan to the committee of creditors (CoC) by May 29.
Lenders have already approved a bid of Rs 34,250 crore from Piramal Capital and Housing Finance (PCHFL) for the troubled mortgage lender. However, the final approval of the resolution plan by NCLT is still pending.
Wadhawan had earlier proposed a settlement plan of Rs 91,158 crore, claiming he would repay 100% of the principal to all the creditors. The settlement offer was rejected by the lenders in which he had proposed to repay lenders by selling his assets. In his Rs 91,158-crore offer, Wadhawan had promised to make an upfront payment of Rs 9,000 crore and to service Rs 31,000 crore of debt in seven years at 8.5% per annum. Besides, he had offered to repay Rs 12,000 crore within a period of seven years at 11.5% per annum, following a one-year moratorium. Kapil Wadhawan has also claimed that he would repay in full non-convertible debenture (NCD) holders and fixed deposit (FD) holders of DHFL.
DHFL has been undergoing insolvency proceedings at NCLT in Mumbai since December 3, 2019. The troubled mortgage lender has admitted claims of Rs 87,120 crore, with State Bank of India (SBI) being the lead creditor.
Bondholders have claimed Rs 45,550 crore while financial creditors have sought Rs 41,342.23 crore from the mortgage financier.
Emails sent to DHFL administrator, Piramal Capital and the State Bank of India did not elicit any response till the time of going to press.