DHFL Submits Draft Resolution Proposal To Lower Ongoing Debt Burden

General News

DHFL headquartered in Mumbai, has, amidst a crisis, submitted a draft resolution plan proposing to convert debt to equity while seeking to sell assets.

Written By Ria Kapoor | Mumbai | Updated On:
DHFL

Dewan Housing Finance Ltd (DHFL), headquartered in Mumbai, has, amidst a crisis, submitted a draft resolution plan proposing to convert debt to equity while seeking to sell assets in order to raise more capital. DHFL, which happens to be the country’s fourth-biggest housing finance company is under a huge debt of 1 trillion rupees  ($14.15 billion). The company owes about 400 billion rupees to banks alone and is a multiple-time defaulter. 

DHFL's draft resolution plan

In a meeting that the company held on Friday, a draft resolution plan was submitted to its lender. According to a company release, this draft came in to inform the lenders of the steps that they might need to take for its implementation and to introduce the fact that 2.3% of each category of lenders' debt exposure is now being proposed by the company. According to the company, it will be converted into equity at an assumed price of 54 rupees per equity share.

READ | Jet Airways crisis: Lenders explore ways to utilise 15 Jet planes, protect valuable assets

READ | Lenders pin hopes on bids from investors as 'best way forward' for survival of Jet

The company has been looking for ways since September

The draft resolution plan will only come to force after the investors and lenders approve of it. However, whether the lenders agree to the conversion price needs is yet to be seen. The shares in the company closed at 42.25 rupees on Friday. It's been a while since the company has been looking at ways to come out of the soup it has been in. The crisis emerged in last year after the collapse of the infrastructure lending behemoth Infrastructure Leasing and Financial Services. Since then, the company has been looking at selling stakes in group entities. It is expected that the enders' will acquire a 51% stake in DHFL after the debt conversion.

READ | Jet Airways lenders finalise on pushing forward with a rescue plan, still no clarity on interim funding

READ | Naresh Goyal steps down as Jet Airways Chairman, lenders to pump in Rs 1,500 crore

(With inputs from PTI)

Published:
By 2030, 40% Indians will not have access to drinking water
SAVE WATER NOW
PEOPLE HAVE PLEDGED SO FAR
DO NOT MISS