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DHFL’s resolution plan hits roadblock

DHFL's resolution plan hits roadblock

MUMBAI: A plan to rescue debt-laden Dewan Housing Finance Company Ltd (DHFL) has hit a serious roadblock as solely a small section of bondholders have agreed to be on board the proposed decision, based on a custodian of DHFL bonds.

The method has been additional sophisticated as sure bondholders have additionally initiated a course of to take DHFL to chapter court docket, the custodian added.

Out of the 87,000 debenture holders who had been requested to be get together to the decision plan being deliberated upon by banks, solely 24,400 debenture holders, or lower than 30%, had responded earlier than the due date earlier this month.

The banks have signed an inter-creditor settlement (ICA) to provide you with a plan to restructure almost Rs 1 lakh crore ($14 billion) of DHFL’s debt. That they had been attempting to get bondholders on board as effectively for the plan to succeed.

Below new central financial institution guidelines for resolving unhealthy money owed, it’s necessary for 75% of lenders by worth and 60% by quantity to signal the ICA to execute a revival plan which in DHFL’s case will be achieved solely with the help of bondholders.

Banks, with an publicity of nearly Rs 36,000 crore, will want help from insurance coverage corporations, pension funds and different institutional traders to approve the decision plan, the deadline for which ends on September 25.

DHFL, one of many largest housing finance corporations in India bumped into hassle final yr quickly after the collapse of IL&FS, a shadow banking behemoth. Troubles at each lenders have sparked an acute liquidity crunch which can worsen.

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