The Reserve Bank of India (RBI) has approved Piramal Capital and Housing Finance's resolution plan for mortgage lender Dewan Housing Finance Ltd (DHFL).
Debt-ridden DHFL's Committee of Creditors (CoC) had in January approved the resolution plan submitted by Piramal Capital for the company. It had pipped US-based Oaktree Capital to emerge as the winning bidder for DHFL.
"We understand that the RBI has approved the DHFL resolution plan from Piramal Capital and Housing Finance, submitted by the CoC," Piramal Group said.
Also read: DHFL resolution: Lenders back Piramal's bid
The CoC will now move to the National Company Law Tribunal (NCLT) for approval of Piramal Capital's resolution plan.
The RBI had referred DHFL to NCLT for insolvency proceedings in November 2019. It was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the Insolvency and Bankruptcy Code (IBC). DHFL's promoters are facing money laundering charges and are currently in jail.
Piramal Capital's bid had received 94 per cent votes from lenders, while Oaktree had receiveed 45 per cent votes.
As per the resolution plan, Piramal Capital will pay Rs 12,700 crore upfront to DHFL's lenders. Over five years, the lenders will be able to recover over Rs 37,000 crore.