DHFL to make payments to lenders with securitisation arrangements: Bombay HC

The Bombay HC had earlier restrained DHFL from making payments to any of its secured/unsecured creditors, including the payments to any fixed deposit holders, on October 10, following a petition filed by mutual funds. Justice AK Menon said in his order: “The payment to banks and non-bank lenders who purchased loan pool from DHFL will be allowed. DHFL can make all future payments and previous dues which were payable since October 10.”

SBI’s counsel argued that DHFL was making regular payments before, however, it failed to honour obligations after the HC’s interim order was passed. If the above order wasn’t modified, these securitised loans may slip into the non-performing assets (NPAs) category, counsel said.

DHFL’s counsel in its reply said, “The company has adequate security cover of 1:1.11 as of September 30 for payments.”

The court has allowed banks and NBFCs to be part of the main petition filed by mutual funds. Edelweiss AMC, Kotak Mahindra AMC, Axis Asset Management and Reliance AMC had moved the Bombay High Court seeking a direction to DHFL to disclose all its assets and liabilities and also to temporarily prevent it from making payments/disbursements to secured and unsecured creditors.

The beleaguered home financier owes Rs 83,873 crore as of July 6, 2019 to banks, the National Housing Board, MFs and bondholders, including retail bondholders.

As of July 6, the DHFL’s secured debt was Rs 74,054 crore while the unsecured debt stood at Rs 9,818 crore.The Wadhawan family, which owns over 39 per cent in the firm, has been looking at various ways to come out of the stress which first came to light late last year following the IL&FS bankruptcy. —FE with PTI