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DHFL gains 14% on likely approval of resolution plan by lenders soon

DHFL has suffered consistent downgrades in its credit ratings since February 2019.

ETMarkets.com|
Updated: Jul 23, 2019, 03.54 PM IST
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DHFL
DHFL on Monday reported a net loss of Rs 2,223.41 crore for the quarter ended June 2019 against a net profit of Rs 1,343.50 crore in the corresponding quarter last year.
Shares of Dewan Housing Finance Corporation gained over 3 per cent in morning trade on Tuesday after the company on Monday said it expects an in-principle approval from its lenders to its the resolution plan by month-end.

The ability of the company to continue as a going concern is predicated upon its ability to monetise its assets, secure funding from the bankers or investors, restructure its liabilities and recommence its operations, DHFL said in a late evening regulatory filing while releasing its audited results.

The company said that DHFL has received non-binding indicative term sheets as part of the proposed corporate restructuring of the company and any proposals approved will constitute a part of the resolution plan.

Promoters of mortgage lender are in talks with private equity firms and are expecting to garner $1 billion (about Rs 6,900 crore) by selling nearly 50 per cent of their holdings, according to a report by PTI.

The Wadhawan family, the promoters of the company, currently holds close to 40 per cent stake in the company.

Private equity firms Lone Star, AION Capital and KKR are in talks with promoters for a strategic stake, PTI said in a report.

Dewan Housing Finance Ltd (DHFL) has suffered consistent downgrades in its credit ratings since February 2019. On June 5, 2019, its credit rating was reduced to 'default grade' despite no default till that date.

“The Company's ability to raise funds has been substantially impaired and the business has been brought to a standstill with there being minimal/virtually no disbursements. These developments may raise a significant doubt on the ability of the Company to continue as a going concern,” it said.

DHFL on Monday reported a net loss of Rs 2,223.41 crore for the quarter ended June 2019 against a net profit of Rs 1,343.50 crore in the corresponding quarter last year.

The shares of the company closed 14.16 per cent higher at Rs 60.05 on BSE.
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