New Delhi: Crisis-hit home loan and property finance company DHFL Monday said it is working with stakeholders and creditors to ensure resolution of liquidity issues, without any hair cut to the lenders. DHFL on Saturday reported a loss of Rs 2,223 crore for the March quarter of 2018-19 financial year.
The company had registered a net profit of Rs 134 crore in the year-ago period. "We are closely working with the stakeholders/creditors to ensure that there is a comprehensive resolution, without any hair cut to the lenders, as has been speculated by few sections of the media," DHFL said in a regulatory filing.
Further, DHFL said the sectorial stress is well known for months, the company has withstood intense pressure and continues to remain strong and solvent. DHFL has also cleared significant amount of obligation to the tune of Rs 41,800 crore since September 2018, it added.
"Since the last nine months, with single minded focus, we have met all our financial obligations and are looking to return to business normalcy at the earliest. Since September 2018, DHFL has managed to make repayments of over Rs 41,800 crore primarily through securitisation of assets and repayment collections," said Kapil Wadhawan, Chairman and Managing Director, DHFL.
The company said due to a significant slowdown in disbursement and loan growth post September 2018, the financials of the firm have been quite strained for the quarter impacting the overall performance of the year.
For 2018-19 financial year, DHFL posted a loss of Rs 1,036 crore. It logged a profit of Rs 1,240 crore in 2017-18. DHFL also said it is in an advanced stage of submitting its resolution plan under the inter-creditor agreement as entered into by banks.
The inter-creditor agreement will examine and firm up the terms of the resolution process by July 25, 2019 and make it operational before September 25, 2019, it said.
"The process of identifying a strategic investor is also nearing completion which will bring in an equity investor into DHFL to bolster its capital base. The board will be reconvening in the next two weeks to look through the potential proposals and will decide accordingly on the way forward," the company said.
The joint lender forum has also taken into account the need for recommencement of business by DHFL and commence originating new home loans. Banks would enable the infusion of necessary liquidity into the system. It is expected that DHFL will be able to restart its business in August 2019 and scale it up in the months ahead.
The company has not been able to fulfil its obligations towards debt repayment in the recent past and there have been cases of a few defaults on commercial papers and bonds. The NBFC sector has been reeling under stress since the unfolding of the IL&FS liquidity crisis in September 2018 due to alleged fraud and mis-management issues.
Meanwhile, DHFL stock plummeted nearly 30 per cent on Monday after the company posted biggest ever quarterly loss of Rs 2,224 crore for the fourth quarter ended March 31.
The scrip of Dewan Housing Finance Corporation Limited (DHFL) plunged 29.15 per cent to close at Rs 48.50 on the BSE. During the day, it tumbled 31.77 per cent to Rs 46.70 — its 52-week low.
At the NSE, shares cracked 29.78 per cent to close at Rs 48.10. On the traded volume front, 68.04 lakh shares were traded on the BSE and over seven crore shares on the NSE during the day.
The company's market valuation also fell by Rs 625.96 crore to Rs 1,522.04 crore on the BSE. Housing finance firm DHFL has said the developments in last few quarters threaten its ability to continue as a going concern, as the company posted biggest ever quarterly loss of Rs 2,224 crore for the fourth quarter of 2018-19.
The debt-ridden company had reported a profit of Rs 134.35 crore in the same quarter previous fiscal. "In the backdrop of a significant slowdown in disbursement and loan growth post September 2018, the financials of the company have been quite strained for the quarter impacting the overall performance of the year," the company said in a late evening regulatory filing on Saturday.
It further said the company is undergoing substantial financial stress since second half of the last 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. These developments may raise a significant doubt on the ability of the company to continue as a going concern," it said.
Dewan Housing Finance Ltd (DHFL) has suffered consistent downgrades in its credit ratings since February 2019. On June 5, 2019, its credit rating was reduced to 'default grade' despite no default till that date.
DHFL is in an advanced stage of submitting its resolution process under the inter-creditor agreement as entered into by banks. As already announced, the inter-creditor agreement will examine and firm up the terms of the resolution process by July 25, 2019 and make it operational before September 25, 2019, it said.