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RBI files application for insolvency proceedings against DHFL

“Debt moratorium on DHFL till insolvency plea admitted,” ETNow reported.

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Last Updated: Nov 29, 2019, 04.04 PM IST|Original: Nov 29, 2019, 03.58 PM IST
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NEW DELHI: The Reserve Bank of India filed insolvency proceeding against beleaguered Dewan Housing Finance Limited (DHFL) with NCLT on Friday.

“Debt moratorium on DHFL till insolvency plea has been admitted,” ETNow reported.

The announcement came post market hours. Earlier in the day, the scrip closed 4.28 per cent higher at Rs 20.70, while the benchmark BSE Sensex closed 336 points, or 0.82 per cent, lower at 40,794.

The mortgage lender had last week informed exchanges that it will not be able to declare financial results on the scheduled date as the new administrator needs to have detailed discussions with the statutory auditors.

DHFL was scheduled to announce its financial results on November 25.

The central bank last week also constituted a three-member panel to advise its administrator to help recover nearly Rs 84,000 crore that the troubled company owes to the system. The panel constitutes a veteran banker, the head of a leading insurer and also representation from a lobby grouping of asset managers.

The RBI had on November 20 used recent changes in the laws to supersede the board of DHFL, announced to resolve the issue under the provisions of the bankruptcy code and appointed R Subramaniakumar as the administrator.

Earlier, DHFL had defaulted on its payment obligations in respect of bank and market borrowings, which reveals serious concerns about the conduct of the affairs of the company.

DHFL lenders were working on a resolution plan to pick up 51 per cent in the company by converting a part of their debt into equity, according to PTI.

As of July 2019, the home financier owed Rs 83,873 crore to banks, the National Housing Board, mutual funds and bondholders, including retail bondholders.

Of this, secured debt is Rs 74,054 crore and Rs 9,818 crore is unsecured.

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