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Lenders give DHFL 7 days to present resolution proposal


Cash-strapped Dewan Housing Finance Corporation Ltd’s (DHFL) stakeholders on Thursday held a meeting to discuss the resolution plan for the mortgage lender.

The stakeholders of cash-strapped Dewan Housing Finance Corporation Ltd (DHFL) on Thursday held a meeting to discuss a resolution plan for the mortgage lender, multiple sources aware of the meeting told CNBC-TV18.
The meeting, held on today morning in Mumbai, was attended by the core group of lenders, mutual funds, provident funds with exposure to DHFL, along with SBI Caps which is acting as the advisor to banks for the restructuring plan, as well as the promoter, Kapil Wadhawan, said sources.
The core group of lenders comprises of seven largest lenders to DHFL, including State Bank of India, Bank of Baroda, Union Bank of India, Bank of India, Canara Bank, Syndicate Bank and Indian Bank, as per sources.
Banks have allowed DHFL seven working days’ time to present a resolution plan to them, said a source who was part of the meeting.
CNBC-TV18 had earlier reported the contours of what DHFL is likely to propose, including the restructuring of its loans, moratorium, and a new line of credit from banks to the tune of Rs 1,200 - Rs 1,500 crore per month for a period of one year.
Banks have also asked the DHFL promoter to pledge their shares as collateral for any fresh loans, and sign an NDU, or Non-Disposal Undertaking, in favour of the lenders until the resolution plan is executed, sources said.
Sources present in the meeting told CNBC-TV18 that broad contours of the draft resolution proposal for DHFL were discussed today, including the restructuring of loans with longer repayment terms, partial debt conversion and additional support by way of a new line of credit.
The non-banking stakeholders, including mutual funds and pension funds among others, have sought an assurance from lenders that the final resolution plan would be collaborative, and not lead to losses for them, added sources. Banks, on their behalf, have assured that the resolution plan would be comprehensive, and would maximise value for all stakeholders involved, said sources.
DHFL is understood to be in talks with private equity players including Aion Cap, Cerberus Capital and Oaktree for a potential stake sale deal, which could fetch the mortgage lender about Rs 7,000 crore, CNBC-TV18 had reported earlier.
DHFL has over Rs 1 lakh crore of borrowings, with banks having over Rs 40,000 crore of exposure, insurance funds/pension funds/FIIs about Rs 30,000 crore, mutual funds about Rs 5,200 crore, ECB/National Housing Bank about Rs 5,000 crore and depositors another Rs 10,000 crore, as per CLSA’s report dated June 6, 2019.

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