Dewan Housing Finance Corp. Ltd (DHFL) shares were locked in upper circuit on Monday, i.e. 14 October, after a media report said that the company has signed a non-binding term sheet with Oaktree Capital to sell its entire Rs 35,000-crore wholesale book.
“DHFL has signed a non-binding term sheet with Oaktree Capital for Rs 35,000 crore of its wholesale book,” an Economic Times report quoted a source close to the development as saying. “It is for lenders led by SBI (State Bank of India) to move ahead with the sale.” The agreement is valid until February, the report added.
At 11:19 am, shares of debt-laden DHFL were trading 5% higher at Rs 22.20 apiece. Notably, the stock has lost over 92% of its value in the last one year.
DHFL, India’s fourth-largest housing finance company, has a total debt of Rs 1 lakh crore, of which Rs 40,000 crore is owed to banks alone. Lenders are currently working on the debt resolution proposal submitted by DHFL management on 29 September. Under the proposal, the DHFL management suggests converting part of banks’ debt into 51% equity, which will result in the stake of the promoter Wadhawan family getting halved to 20%.
DHFL’s project loans amount to Rs 35,078 crore, which are now being sold to Oaktree, while those on account of the Slum Rehabilitation Authority (SRA) stand at Rs 11,967 crore, according to the report.
The committee of creditors will now meet on 13-15 November to vote on the debt resolution plan. DHFL is expecting lenders to move quickly on the plan so that the company gets fresh credit as soon as possible.
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Source: News18