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After Edelweiss AMC, Kotak, Axis MFs too move Bombay High Court against DHFL

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.

PTI|
Updated: Oct 17, 2019, 11.56 PM IST
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As of July 6, DHFL's secured debt was Rs 74,054 crore while the unsecured debt stood at Rs 9,818 crore.
MUMBAI: Kotak Mahindra Asset Management and Axis Asset Management on Thursday moved the Bombay High Court seeking a direction to the crippled mortgage lender DHFL to disclose all its assets and liabilities.

The petitioners also prayed for a temporary restraint on DHFL to prevent it from making further payments/disbursements to secured and unsecured creditors, except certain payments made on pro-rata basis to secured creditors.

The court has granted four weeks time for the parties to file replies.

Earlier this month, the court had restrained DHFL from making further payments/disbursements to any unsecured creditors until further orders.

The court granted a plea of Reliance Nippon Asset Management (recently renamed Nippon India Mutual Fund) to restrain lenders from disposing of any assets.

The court also allowed Edelweiss AMC's prayer to disclose all assets and liabilities of the non-bank lender.

A debt resolution plan, approved by the lenders led by Union Bank in August, is awaiting final approval as mutual funds (MF) are yet to sign the inter-creditor agreement.

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. And as of July 6, DHFL's secured debt was Rs 74,054 crore while the unsecured debt stood at Rs 9,818 crore.

The MFs have to sign the inter-creditor agreement (ICA) if the resolution plan were to get going as according to the Reserve Bank's June 7 NPA resolution framework, for a resolution plan to be passed, 75 per cent of lenders by value and 60 per cent by numbers must approve it and sign the ICA.

Under the draft resolution plan submitted by DHFL, the lenders would pick up 51 per cent in the third largest mortgage lender by converting a part of their debt into equity.

The company has been facing liquidity issues since last September and yet has paid back Rs 41,000 crore of its financial obligations through a combination of securitization of assets and repayment collections since.

The Wadhawan family, who owns a little over 39 per cent in the company, 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.

These include selling stakes in group entities, including in the flagship to the extent of giving up management control.

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