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DHFL’s Board Approves Conversion Of Debt Into Equity

By Staff

Dewan Housing Finance Corporation Ltd (DHFL) on Friday informed the exchanges of that its board has approved the conversion of the whole or part of its debt into equity or other securities, which may result in a change in ownership.

The debt-laden finance company had earlier said its creditors would not have to take any haircuts on principal payments under its resolution plan.

DHFL’s Board Approves Conversion Of Debt Into Equity

In the stock exchange filing, DHFL said that "based on extensive discussions with the Lenders on the draft Resolution Plan, the Board considered it necessary to approve certain actions," that includes, "conversion of the whole or part of the debt into equity shares or other securities of the Company in accordance with the applicable law with the price of such conversion being in line with the applicable laws and which may result in a change in ownership of the Company."

Further, the company's board also approved an increase in its authorised share capital from Rs 828 crore to Rs 1,090.39 crore.

Among other decisions, the DHFL board also decided for additional credit facilities that it can avail on the existing borrowing limits as well as disposal of whole or part of the undertakings or assets of the company.

As part of the resolution plan, DHFL will also put a moratorium on repayments and seek funding from banks to start retail lending.

The housing finance company has a massive debt of over Rs 90,000 crore piled up. It has been working on lender approval on its restructuring plan that is designed to help it come out of a liquidity crunch and restart its lending business.

Shares of DHFL closed higher by 0.85 percent at Rs 47.60 apiece on BSE on Friday.

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