DHFL CoC to vote on selling company in three parts

FE Bureau
dhfl, committee of creditors

The committee of creditors (CoC) for Dewan Housing Finance Corp (DHFL) is looking to vote on a proposal of inviting bids for the company in three parts, sources close to the development told FE. The Reserve Bank of India (RBI)-appointed administrator R Subramaniakumar presented the proposal during a meeting on Thursday January 16 that will seek to invite bids for the company in three parts - retail, non-retail and slum rehabilitation authority (SRA) project loans, the source added.

The committee of creditors held the meeting to discuss the criteria for potential bidders for the beleaguered NBFC. After the result of voting is declared, the process of inviting expression of interest (EoI) will begin, said the source.

FE has learned that the committee of creditors approved proposals on cost that would be incurred by the company during the resolution process. This includes Rs 75 lakh per month for advisor to administrator-EY India. The CoC also approved fees to legal adviser AZB Partners which amounted to Rs 11,500 per hour on a blended basis. The administrator informed the CoC on December 30, 2019 that DHFL's assets under management stood at Rs 1,19,952 crore.

The troubled mortgage financier has so far received claims for Rs 92,404 crore from creditors, which included financial creditors, operational creditors, deposit holders along with employees and workmen. DHFL has received Rs 45,550.07 crore from bondholders and Rs 41,342 crore from lenders.

The NCLT, Mumbai, had admitted DHFL for the insolvency resolution on December 2, 2019 after the Reserve Bank of India’s direction under Section 227 of the IBC. Lenders initially tried to resolve DHFL's stress as per the RBI's prudential norms on stressed assets resolution. A resolution plan was then approved by DHFL's board in September, which proposed a conversion of debt to equity, leading to lenders acquiring a 51% stake in the company.