MUMBAI : Creditors to Dewan Housing Finance Corp Ltd (DHFL) will meet on 16 January to discuss, among other issues, the eligibility criteria for prospective resolution applicants, said a person aware of the development.
Other things on the agenda, the person said, are updates on the insolvency process since the first meeting held on 30 December; discussion on resolution strategy for the mortgage lender and an update on its operations. Moreover, the RBI-appointed administrator is also expected to discuss the status of claims submitted by creditors.
In the last meeting, the committee of creditors (CoC) had approved a plan under which the mortgage lender was will resume advancing home loans beginning with ?500 crore a month to arrest the decline in its loan book. The company has not disbursed loans in more than six months, due to a liquidity crunch that also led to a series of defaults in repaying debt. At present, DHFL’s assets under management stand at ?1,19,952 crore, of which ?63,690 crore are in retail loans and the rest in wholesale.
R. Subramaniakumar, the administrator appointed by the Reserve Bank of India (RBI), is concerned that the rapid decline in DHFL’s loan book will make it less valuable to potential investors.
Meanwhile, it is to be seen if Subramaniakumar provides an update on pending dues of lenders from securitized assets. Since the insolvency process began, lenders have stopped receiving repayments for assets bought under securitization deals from DHFL. The administrator has already made representations to RBI and suggested banks in the last meeting to approach the regulator independently as well.
On 20 November, the RBI superseded DHFL’s board and later referred the mortgage lender to the National Company Law Tribunal (NCLT). The central bank’s initiative was meant to secure the interests of creditors, including fixed deposit holders of DHFL and check any systemwide shock.
DHFL is the first non-bank lender to be referred to NCLT under new rules notified by the government on 15 November. RBI had cited governance concerns and payment defaults by DHFL as reasons for superseding the board.
According to the RBI order cited by DHFL in a regulatory filing in November last year, a statutory inspection of DHFL conducted by National Housing Bank with reference to its position as on 31 March, 2018 revealed serious deterioration in its financial position. In September, RBI had also superseded the board of crisis-hit Punjab and Maharashtra Cooperative (PMC) Bank Ltd and appointed Jai Bhagwan Bhoria as the bank’s administrator.
News Source: livemint