DHFL debentures trustee considers giving NCD holders time to sign inter-creditor agreement

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Published: August 27, 2019 2:10:17 AM

The process was initiated after the firm was approached by the lead banker in the account, Union Bank of India.

The process was initiated after the firm was approached by the lead banker in the account, Union Bank of India.

Catalyst Trusteeship (CTL), the debenture trustee for retail and institutional bond investors, including some gratuity and pension funds, of Dewan Housing Finance Corporation (DHFL), is considering giving debenture holders further time to send in their consent on acceding to the inter-creditor agreement. Catalyst is a trustee for between 86,000 and 87,000 bond holders of DHFL. Debenture holders had been given time till August 26 to send in their consent forms.

Catalyst Trusteeship that acts as trustee for several issuances of non-convertible debentures issued by DHFL initiated the process of seeking consent from bond holders earlier this month, to authorise itself to agree to the ICA, and thereby participate in the process of formulation of the resolution plan. The process was initiated after the firm was approached by the lead banker in the account, Union Bank of India.

A source aware of the developments said, “The process has been outsourced, making it difficult to give an exact number on how many bond holders have given their consent. There is some thought to extend the time by anywhere between a week and a month. Of course, this is only exploratory. If the scheme does not work out, there are other legal options to pursue, including DRT (Debts Recovery Tribunal).”

According to an open letter addressed to debenture holders of DHFL, Catalyst has outsourced the process to a firm called Link Intime India. A release on the CTL website states, “If 75% or more (in value term) in a Series gives consent by signing the consent letter, Catalyst Trusteeship will sign ICA on behalf of debenture holder under such Series. The proposal of DHFL submitted to the Committee of Creditors constituted under the ICA will examine and finalise the resolution plan. The finalised plan will be sent to debenture holders by Catalyst Trusteeship for their consent. If consent is received (75% of value or more), it will convey acceptance to the CoC for taking action accordingly.”

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