Mortgage lender Dewan Housing Finance Corporation Ltd (DHFL) on Tuesday said its resolution plan seeks a moratorium on repayments but lenders will have to take no haircuts on the principal amount of their loans.
In a regulatory filing, DHFL said that the salient features of its resolution plan include “no principal haircuts to any creditors; the proposed steps and measures towards addressing asset-liability mismatch and moratorium on repayments, and seeking funding from banks and the National Housing Bank (NHB) for starting the retail funding activity”.
According to the filing, the special committee for the resolution plan, which met on Tuesday, took on record the draft resolution plan formulated by the company in consultation with the committee and EY. The special committee, DHFL said, has approved the submission of the resolution plan to the lenders.
Lenders to DHFL are looking for a resolution plan and have signed an inter-creditor agreement (ICA). They have also met institutional bondholders, comprising mutual funds, provident funds, and pension funds, to explore options of working together under the resolution proposal.
The mortgage lender has been among the worst hit by the liquidity crisis triggered by defaults at Infrastructure Leasing and Financial Services Ltd (IL&FS) that dried up access to funds for many non-banks.
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