DHFL to soon submit proposed plan to all lenders

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Published: July 27, 2019 5:16:38 AM

The cash-strapped home loan financier has a cumulative debt of Rs 1 lakh crore, of which it owes Rs 38,000 crore to banks and Rs 34,000 crore to bondholders.

DHFL, DHFL via NCD, RBI, SBI Caps, Companies Act, Reserve Bank of IndiaThe circular allows lenders a 30-day ‘review period’ from date of default to decide on a resolution strategy, including the nature of the plan and approach for implementation.

Cash-strapped Dewan Housing Finance Corporation is expected to submit its proposed resolution plan to all its lenders for their consideration shortly. The cash-strapped home loan financier has a cumulative debt of Rs 1 lakh crore, of which it owes Rs 38,000 crore to banks and Rs 34,000 crore to bondholders.

Meanwhile, mutual funds have an exposure of Rs 2,200 crore to DHFL via NCDs and Rs 180 crore of CPs. In a note to exchanges, the home loan financier said, “We wish to inform you that the Company has been constantly engaged with the lenders to formulate and finalise the resolution plan and expects to submit the resolution plan for consideration by the lenders shortly, which is within the time frame available with the Company as envisaged in the Circular.”

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Meanwhile, several banking sources have indicated to FE, the company’s default on June 25 prompted lenders to undertake a review of the account, in line with the Reserve Bank of India’s June 7 circular on prudential framework for resolution of stressed assets.

The circular allows lenders a 30-day ‘review period’ from date of default to decide on a resolution strategy, including the nature of the plan and approach for implementation. The dates suggest bankers are already staring at the end of the review period, which would mean they have 180-days here on to implement a viable resolution plan.

In an earlier notice to the exchanges, DHFL mentioned that it has formed a committee of the board of directors, which has the authority and powers under the Companies Act, 2013 to formulate, consider, finalise and approve the resolution plan in accordance with the RBI’s June 7 circular.

Meanwhile, banking sources have indicated to FE that SBI Caps, company officials and a team of bankers from select banks within the consortium have been working together on the resolution plan and which could be finalised soon.

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