Dewan Housing Finance Corp. Ltd (DHFL) has inked a nonbinding term sheet with Oaktree Capital to sell its complete Rs 35,000-crore wholesale book. The agreement will expire February.
Banks have inked the inter-creditor agreement (ICA) and are analyzing resolution proposal put forward by DHFL management, including converting part debt into 51 percent equity.
This will include the stake of the Wadhawan family, the promoters, halve to 20 percent. DHFL’s project loans are worth Rs 35,078 crore, being sold to Oaktree. Stake on the Slum Rehabilitation Authority (SRA) stands at Rs 11,967 crore.
The management assumes that the lenders, led by State Bank of India (SBI), will complete the debt resolution proposal fast so that the company gets fresh credit. The committee of creditors will be meeting on November 13-15 to vote on the resolution. It’s expectant of gathering Rs 1,000-1,500 crore in such lending from banks to help grow the credit book.
DHFL has named Vaijinath MG, a former chief general manager of State Bank of India as CEO, and circulated a draft debt resolution plan.
This will likely reach a price of Rs 54 per share for the conversion of part debt into equity by lenders that would give them a 51 percent stake, said the company in its resolution plan submitted to exchanges on September 28.