14 July 2019: Dewan Housing Finance Corporation (DHFL) on Saturday said it had made fresh defaults in two instances. On July 6, it failed to meet an interest payment obligation of Rs 19.59 crore on private placement NCD and of Rs 28.41 crore on July 8 towards another private placement NCD.
Since June, the company has either delayed or defaulted on interest payments of various instruments. On June 4, it missed interest payment on secured redeemable NCDs worth Rs 900 crore but later revealed it had made full payment within the cure period. Soon after, on June 25, it defaulted on maturing unsecured commercial paper to the tune of Rs 225 crore. More recently, on July 4, the company said it defaulted on interest payments on private placement secured redeemable NCDs to the tune of Rs 4.75 crore and of Rs 1.19 lakh on public issue of NCDs.
On Saturday, it announced fresh defaults in two instances. On July 6, it failed to meet an interest payment obligation of Rs 19.59 crore on private placement NCD and of Rs 28.41 crore on July 8 towards another private placement NCD. Lenders to the housing financier have since signed an inter-creditor agreement to resolve the account and DHFL is expected to present a resolution proposal next week.
The company also reported a net loss of Rs 2,223 crore for the March quarter on Saturday. In the same quarter last year the lender had posted a net profit of Rs 134.4 crore. DHFL deferred the announcement of financial results for the March quarter to Saturday, which was earlier scheduled for June 29, citing the unavailability of the management concerned.
Gross non-performing assets (NPA) stood at 2.74% as on March 31 against 0.91% in the previous quarter and 0.96% in the corresponding quarter last year.
Provisions in Q4FY19 rose to Rs 729.47 crore from Rs 373.13 crore in the corresponding quarter last year.
DHFL’s liquidity crisis has led to the downgrade of its debt of over Rs 1 lakh crore across various instruments including long-term borrowing and fixed deposits to D from AAA by various rating agencies like Crisil, CARE, ICRA and India Ratings.
“The company is taking active steps to monetise its assets and is in discussions with multiple Indian banks and international financial institutions to sell off its retail as well as wholesale portfolio. It is in discussions with the consortium of bankers/ lenders to restructure its borrowings and will take all the necessary steps to ensure that it meets’ its financial commitments,” notes to the result read.
It further stated, “In view thereof, the requirements in respect of creation of debenture redemption reserve and the corresponding deposit in liquid assets shall be assessed upon conclusion of the restructuring plan. The Company is in the process of submitting a resolution plan to the lenders and the lenders are expected to give an in-principle approval to the plan by end of July 2019.” It also referred to discussions for stake sale by the promoters to a strategic partner with further equity infusion and plan to monetise the wholesale loan portfolio.
The company also tabled a report in Saturday’s board meeting regarding an independent review of allegations against the management and promoters by a media portal revealing procedural lapses, documentation deficiencies and failure on monitoring end use of the funds loaned as per the mandate of loan sanction conditions.
“The statutory auditors posted their review of the independent chartered accountants report, provided their observations and suggestions on the scope, coverage and findings by the independent chartered accountants in the report, as well as additional areas that needed to be covered. The management is in the process of determining the action to address the comments of the statutory auditors,” the company said in a release.