DHFL Lenders to get payments this week
Dewan Housing Finance Ltd, the first NBFC to be referred to NCLT by the RBI under a special provision, is expected to complete its resolution process in Sep-21. The process was likely to be completed in the first week of September but was held up for various technical reasons.
DHFL’s biggest lender, SBI, has already signed the transaction document while the other financial creditors like Union Bank, Bank of Baroda, Canara Bank and Bank of Baroda are also expected to sign the transaction document this week. Under the NCLT regulations, the resolution deal becomes effective only after 90% of the financial creditors endorse the transaction document.
Under the terms of the resolution, Piramal Capital will pay a total consideration of Rs.37,250 crore against total admitted claims of Rs.87,082 crore. That implies about 42.7% recovery for the banks or you can also call it a 57.3% haircut. Out of this sum, Rs.12,700 crore will be the upfront cash payment and an additional Rs.3,000 crore is the interest income earned by DHFL during the CIRP process, which is also being paid out.
Also Read :- Will DHFL Shares Be Delisted After Being Acquired by the Piramal Group?
In addition, the financial creditors will get Rs.19,550 crore by way of non-convertible debentures. These NCDs will mature after 10 years in 2031 but there will be a call back facility after 5 years under the terms of the resolution plan. This will be the second largest pay-out to lenders after the Rs.42,000 crore that Arcelor Mittal and Nippon Steel paid for Essar Steel owned by the Ruia brothers; Ravi Ruia and Shashi Ruia.
The NHB dues of Rs.2,300 crore are currently under dispute over preferential payment. However, the COC agreed to set aside the NHB claim of Rs.2,300 crore to expedite the process and complete it in this month. The acquisition will be funded by Piramal, partly through debt and partly through internal resources. Barclays will arrange a loan of Rs.4,500 crore while Standard Chartered has arranged a loan of Rs.9,000 crore for the deal.
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