DHFL resolution plan may come with riders, fresh credit likely: Reports

Lenders to the troubled Dewan Housing Finance Corporation (DHFL) are drawing up a resolution plan with conditions for the promoters while a fresh line of credit may also be on the cards for the non-banking finance company.

In a consortium meeting held on July 1, lenders discussed conditions like pledging of shares by promoters, providing personal guarantees and a reconstitution of company’s board with the appointment of new directors and managerial staff, according to a report.

Lenders, including State Bank of India (SBI), Union Bank of India and Bank of Baroda that attended the meeting, have appointed SBI Capital Markets as an adviser and Cyril Amarchand Mangaldas as a legal counsel for working on the resolution plan.

As per regulatory norms, banks need to sign an inter-creditor agreement to implement the plan, which has been scheduled for July 5.

DHFL owes around Rs 38,000 crore to the consortium, a part of which will likely be converted into equity. The NBFC is also planning to sell its wholesale loan portfolio to repay this debt. DHFL’s Chairman and MD Kapil Wadhawan is said to have assured lenders of bringing in fresh capital to the tune of Rs 7000-10,000 crore from new investors, according to a report.