DHFL to present debt-resolution plan within 7 days

Mumbai: Dewan Housing Finance will present the debt- resolution plan within seven working days, after the bankers and bond holders of the company met on Thursday to decide on a resolution roadmap for the outstanding loans, a person in the know of the development said.

Bankers and bond holders of DHFL met on Thursday to create a resolution roadmap for more than Rs 1 lakh crore of loans under stress.

The company wants resolution plan to be a collaborative approach for maximisation of value for all stakeholders, the person said.

Last week, DHFL’s lenders agreed on an intercreditor agreement (ICA) to begin a restructuring plan under the Reserve Bank of India's revised circular for restructuring stressed assets. The agreement was formed yesterday, but was yet to be signed, the person said.

Economic Times on Thursday reported that banks will provide further loans to the company only if the promoters pledge their shares as collateral. DHFL is seeking fresh credit from banks.

DHFL has missed deadlines for interest payments and redemption of some of its short-term papers in recent times, but the company claims it has managed to honour those obligations within the specified buffer period to avoid any default.

The company claims it has monthly cash flow of around Rs 2,200 crore, which it has been using to meet obligation even as advances have been frozen completely amid a crippling liquidity squeeze.

Bank of Baroda and State Bank of India have large exposures in the form of term loans given to DHFL. SBI, Bank of Baroda, HDFC Bank, ICICI Bank, Axis Bank and Union Bank have a total exposure of more than Rs 40,000 crore to DHFL.

When contacted, a DHFL spokesperson declined to comment.