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Dewan Housing Finance Corp. Limited’s fixed deposit holders who are on the edge of loosing a wide part of their savings might witness some relief with lenders to the bankrupt mortgage lender eyeing a increased payout to FD holders from the firm’s insolvency proceedings.
According to DHFL’s resolution plans, DHFL’s committee of creditors (CoC) may agree to an additional Rs.966 crore for the FD holders from the recoveries created as reviewed by Mint. This proposal will lead to a voting this week and would necessitate money to be redistributed among various categories of the creditors.
The FD holders have claims that estimates around Rs.5,299 crore as yet. It is assumed that they will be able to recover less than half of it. On the other hand, if the additional pay-out is agreed, FD holders will gain around Rs.2,189 crore altogether. This will result in increase in recovery for the FD holders to 41.31 per cent from 23.08 per cent at the moment.
Since December 2019, when the mortgage lender was admitted to the insolvency tribunal, the FD holders have been struggling to recover their savings. The FD holders poses a 6.18 per cent voting share in the Committee of Creditors (CoC) and have been defending DHFL resolution plan claiming it to be discriminatory.
The latest development of the issue is followed when the Mumbai bench of the National Company Law Tribunal (NCLT) asked the creditors to re-examine the distribution of funds. On 7th June, the insolvency tribunal allowed Piramal Capital and Housing Finance Limited’s bid to acquire DHFL for Rs.37,250 crore. The tribunal on its 7th June order stated that considering lakhs of small investors and senior citizens have deposited their savings they should receive a fair share of the resolution money.
Lenders have also enquired an additional Rs.540 crore for the unsecured non-convertible debenture (NCD) holders followed by Rs.263.6 for small secured NCD holders. Apart from the mentioned holders, other who are eligible for additional funds comprises the Army Group Insurance Fund which will receive around Rs.21.85 crore, the Navy Children School that is to receive Rs.1.95 crore following the Air Force Group Insurance Society which will receive almost Rs.56.09 crore. Financial creditors namely the banks will release around Rs.1,853.21 crore or 5.4 per cent of the total resolution value.
An NCLT order notified, “With regard to the decision on distribution to public depositors, fixed deposit holders and subscribers to NCD’s we request the CoC to reconsider their grievances. It further stated that their request is to enhance the percentage of the payment formulated in the plan.
The tribunal clarified that the review was with the regard to the distribution of the funds and did not concern the total resolution plan outlay. It elaborated that they make it clear that there is no additional monetary obligation for the successful resolution applicants to pay anything excess than what it had committed in the resolution plan, that suggests an amount of around Rs.37,250 crore. It further notified that it is only inter distribution of resolution money among the various creditors.
Primal Capital have achieved approvals from the Competition Commission of India and the Reserve Bank of India for its bid to acquire DHFL. Its resolution plan too received around 94 per cent of the votes from the DHFL’s creditors.