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Last Updated : Aug 22, 2019 12:11 PM IST | Source: Moneycontrol.com

DHFL plummets 8% as lenders eye 51% stake in troubled NBFC

Lenders to DHFL may take over the troubled housing finance company as a temporary measure if the consortium fails to find new investors.

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Shares of Dewan Housing Finance Corporation (DHFL) fell over 8 percent intraday on August 22 amid reports that lenders of the troubled NBFC are eyeing a 51 percent stake in the company by converting a part of debt into equity.

Lenders to DHFL may take over the troubled housing finance company (HFC) as a temporary measure if the consortium fails to find new investors. However, the resolution plan would also require the approval of all regulators in order to materialize.

The scrip has been under pressure lately. On August 19, the company reported a financial repayment default worth Rs 1,571 crore regarding the issuance of bonds and commercial papers.

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Reacting to the news, the stock has been trading in the red for two straight sessions.

DHFL owes Rs 80,000 crore to banks, mutual funds, insurers and pension funds. As per norms laid down by the banking regulator, lenders are required to sign an Inter-creditor Agreement (ICA) to finalize a resolution process. But the involvement of entities other than banks, in this case, has complicated the process.

Meanwhile, Wadhawan Global Capital (WGC), the parent of cash-strapped Dewan Housing Finance Corp. Ltd (DHFL), is selling its loan distribution business Andromeda Sales and Distribution Pvt. Ltd to London-based metal trading firm, Metdist Group of companies for close to Rs 150 crore, Mint reported, citing sources.

The sale of Andromeda is part of WGC’s attempts to raise capital to meet debt obligations at the group’s flagship company DHFL.

At 1209 hrs, DHFL was quoting Rs 42.35, down 7.13 percent on the BSE.

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First Published on Aug 22, 2019 12:08 pm
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