Dewan Housing Finance Corporation on Thursday said it may not meet its upcoming payment obligations in the ‘immediate future’, even as it remains in discussions with lenders over a resolution plan. The mortgage financier owes banks Rs 38,000 crore and bondholders an additional Rs 34,000 crore. Mutual funds have an exposure of Rs 2,200 crore to the company via NCDs (non-convertible debentures) and Rs 180 crore of commercial paper.
The cash-strapped NBFC said, “Given the ongoing discussions on the resolution plan with the lenders who have signed the ICA, the company believes that its payment obligations falling due in the immediate future, may not be met as per their existing schedule.”
Earlier this week, it submitted a draft resolution plan to lenders that have signed the inter-creditor agreement (ICA). As sources earlier indicated to FE, two or more lenders, including a large private bank were yet to sign the ICA until July end.
Mutual funds, meanwhile, are awaiting a nod from the Securities and Exchange Board of India’s (Sebi) to sign the ICA. Meanwhile, DHFL said one of its debenture trustees – Catalyst Trusteeship Services – is also in the process of seeking consent from debenture holders to be party to the ICA.
Reserve Bank of India governor Shaktikanta Das indicated on Wednesday that allowing other categories of lenders to become signatories to the ICA would allow all sections of creditors to “look at the whole liability of an entity comprehensibly”. Das added the central bank was in discussions with other regulators like the Sebi and Irdai (Insurance Regulatory & Development Authority of India) for the same.
DHFL was lending Rs 4,000 crore a month before it was beset with liquidity problems. Lending operations have since come to a complete standstill. The company has reiterated that despite liquidity issues and multiple ratings downgrades, it has paid dues of over Rs 41,000 crore through a combination of securitisation of assets and repayment collections.