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Dewan Housing Finance Corporation (DHFL), which posted a loss of Rs 2,223 crore on Saturday, said business has been brought to a standstill with there being “minimal or virtually no disbursements”. The company, which owes around Rs one lakh crore to banks and investors, said “it is undergoing substantial financial stress since second half of the current financial year.”
“The company’s ability to raise funds has been substantially impaired and the business has been brought to a standstill with there being minimal/virtually no disbursements,” it said in a stock exchange filing. “These developments may raise a significant doubt on the ability of the company to continue as a going concern,” the housing finance company said.
According to DHFL, due to the current business environment, the company no longer holds the project loan, SRA loan and wholesale mortgage loan portfolio for the purposes of solely collecting the principal and interest.
“The management envisages to monetise the wholesale loan portfolio. Consequently, the said loans aggregating Rs 34,818 crore (including Rs 16,487 crore) have been reclassified as Fair Value Through Profit or Loss (FVTPL) as at March 31, 2019 due to the change in business model,” it said.
As required under Ind AS 109, these assets have been fair valued as at March 31, 2019 based on internal valuations which involve management’s judgment and assumptions at Rs 31,628 crore and the resultant fair value loss aggregating Rs 3,190 crore has been charged to the statement of profit and loss, DHFL stated.
Despite these adverse conditions, the company has repaid amounts aggregating approximately Rs 41,800 crore since September 1, 2018, part of which related to prepayment of its liabilities, it said.
“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,” DHFL said.
