The creditors of beleagured mortgage lender Dewan Housing Finance Corporation Ltd (DHFL) have approved the resolution bid submitted by Piramal Capital and Housing Finance Limited. The decision was taken at the 18th committee of creditors (CoC) meeting held on January 15, 2021.
"The e-voting on resolutions pursuant to the 18th meeting of the Committee of Creditors of the company concluded on January 15, 2021 at 8 pm IST and the resolution plan submitted by Piramal Capital and Housing Finance Limited (under Option I in terms of the RFRP dated September 16, 2020) was duly approved by CoC by majority voting under section 30(4) of the Insolvency and Bankruptcy Code read with Reg. 39(3) of CIRP Regulations, as the successful resolution plan," DHFL said in a rregulatory filing on Sunday.
Reports suggest that Piramal's bid received 94 per cent votes, as opposed to 45 per cent votes to competitor Oaktree Capital
Since the conclusion of the fifth and final round of the bidding process last month, Piramal and Oaktree Capital each claimed that their bid was the highest and fully implementable. According to sources, suitors have submitted bids in the range of Rs 35,000-37,000 crore.
In November 2019, the Reserve Bank referred Dewan Housing Finance Ltd (DHFL), the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings.
DHFL was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC. Before that, the company's board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).
As of July 2019, the company owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders.
Its large lenders are SBI, including SBI Singapore with Rs 10,083 crore exposure. Others are Bank of India (Rs 4,125 crore), Canara Bank (Rs 2,681 crore), NHB (Rs 2,434 crore), Union Bank (Rs 2,378 crore), Syndicate Bank (Rs 2,229 crore), Bank of Baroda (Rs 2,075 crore), Indian Bank (Rs 1,552 crore), Central Bank (Rs 1,389 crore), IDBI Bank (Rs 999 crore) and HDFC Bank (Rs 361 crore).
DHFL had total assets amounting to Rs 79,800 crore as of March 2020, as per its annual report. Of these, Rs 50,227 crore or 63 per cent of the total portfolio was reported as gross NPAs.
(With PTI inputs)