Bombay High court received Supplications from Kotak and Axis Fund Houses
Dewan Housing Finance (DHFL) has been in the news over the past few weeks due to several reasons. On Thursday, Kotak and Axis MF approached Bombay high court to recover all its assets and liabilities from DHFL. For a temporary restraint on DHFL, petitioners prayed to prevent further payments/disbursements to secured and unsecured creditors, except for certain payments made to secured creditors on a proportional basis.
As of the report, at the start of this month, the high court had restricted DHFL from making further payments/disbursements to any unsecured creditors until further orders.
Nippon India Mutual Fund and Edelweiss Mutual Funds have already approached the high court. Both NIMF and EMF requested to recover all their dues from DHFL.
While the court approved a petition of Reliance Nippon AMC to control investors from the placing of any assets. Moreover, it also allowed Edelweiss AMC’s request to list all assets and liabilities of the non-bank lender.
Inter-creditor agreement (ICA)
A debt resolution plan is approved by the lenders managed by Union Bank in August, is awaiting final consent as mutual funds (MF) are yet to sign the inter-creditor agreement (ICA).
As of 6th July, the total debts of DHFL stood at Rs 83,873 crore. Moreover, DHFL has Rs 74,055 crore under secured debts and Rs 91,818 crore under unsecured debts in its total debts.
The MFs need to comply with the inter-creditor arrangement (ICA). If the resolution plan has to get moving as indicated by the Reserve Bank’s June 7 NPA resolution system, for resolution intends to pass, 75 percent of lenders by worth and 60 percent by numbers must support it and sign the ICA.
Following the draft resolution proposal submitted by DHFL, the lenders would keep up 51 percent in the third-largest debt lender by converting a part of their debt into equity.
From the last September, the firm has been facing liquidity problems. Although, it has paid back Rs 41,000 crore of its financial obligations through a mix of securitization of assets and repayment collections since.
The Wadhwa Group has been looking for different ways to come out from the pressure which originally became identified before the end of last year following the IL&FS insolvency. Because the group has owned a little more than 39 percent in the firm.
These consolidate selling stakes in bunch entities, incorporating into the flagship to the extent of allowing the management control.