The Dewan Housing Finance Corp Ltd (DHFL), one of India’s biggest housing finance company has said that the financial situation of the company is so grim that it might not survive.
The company said it was “undergoing substantial financial stress” and its ability to raise funds was “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,” the company said in notes following the result of the fourth quarter ending March 31, signed by Chairman and Managing Director Kapil Wadhawan.
DHFL posted a net loss of Rs 22.23 billion ($324.3 million) during the quarter compared with a profit of Rs 1.34 billion in the same period a year earlier.
DHFL separately announced on Saturday that it had defaulted on interest payments worth Rs 285.8 million on non-convertible debentures, due on July 6 and July 8.
DHFL said it was talking to bankers and other lenders on restructuring its borrowings, was in discussions over the sale of its retail and wholesale portfolio, and had also had talks with a potential strategic partner to take a stake.
The ability of the company to continue as a going concern is predicated upon its ability to monetize its assets, secure funding from the bankers/investors, restructure its liabilities and recommence its operations,” it said in the notes.
The results published late on Saturday were unaudited. It was not immediately clear why its auditors had not signed off.
The audit committee had asked the board to submit audited stand-alone and consolidated financial results by July 22. Previously said it had delayed announcing results for the year to March 31 due to “unforeseen operational engagements.”
The reported loss was largely due to additional provisions related to an assessment of the fair value of its portfolio and for an expected credit loss, the firm said.
(With inputs from Reuters)