DHFL crisis: Lenders ready for haircut : The Tribune India

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DHFL crisis: Lenders ready for haircut

MUMBAI:Lenders to Dewan Housing Finance Ltd (DHFL) are prepared to accept limited haircuts as part of a debt restructuring plan being worked out for the troubled firm, said sources involved in talks.

DHFL crisis: Lenders ready for haircut

A woman walks past a signboard of DHFL outside its office on the outskirts of Mumbai. Reuters file



Mumbai, July 16

Lenders to Dewan Housing Finance Ltd (DHFL) are prepared to accept limited haircuts as part of a debt restructuring plan being worked out for the troubled firm, said sources involved in talks.

The country’s fourth largest housing finance company, which warned on Saturday that its financial situation was grim and business had grounded to a halt, met with lenders and other debtholders last week to discuss the contours of the rescue package.

Sources said efforts were being made to arrive at a consensus and sign off on the plan that is set to be formally submitted by the firm to its lenders later this week.

“Even if we must end up taking say around a 20% haircut on the commercial loan part of the book which is big, it is still manageable,” a banker who attended the meeting said. The banker and other sources asked not to be named as they have not been authorised to discuss the matter with media.

DHFL’s plight underscores the growing stress in India’s financial sector as state-owned banks are grappling with nearly $150 billion of bad debt, even as the country’s shadow banking industry has been brought to its knees by a liquidity crunch following the collapse of infrastructure lender IL&FS last year.

The housing finance firm, however, said on Monday it was working with stakeholders and creditors to ensure a resolution plan without its lenders having to take a haircut. And despite defaulting on certain payments as late as last week, DHFL said it was confident of securing fresh credit lines from lenders and restarting its lending operations as early as in August. — Reuters


Owes Rs 1 lakh cr

The company has a total debt of nearly Rs 1 lakh crore as of end-March, including around Rs 40,000 crore to banks. SBI and subsidiaries have an exposure of Rs 19,000 crore to the company.

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