Financial creditors to Dewan Housing Finance Corp. are set to get paid over the next few days, as the insolvency process comes to a close. On Monday, creditors led by State Bank of India signed a debenture transfer agreement with Piramal Group, three people in the know confirmed.
These agreements will allow lenders to take over debentures issued by Piramal Group against DHFL's loans. After this, Piramal Group will pay the Rs 12,700-crore upfront cash consideration, out of its Rs 38,000 crore bid for DHFL.
After this transaction is completed, Piramal Group can fully take over the assets and businesses of DHFL, under the Insolvency & Bankruptcy Code. Piramal Group had originally won the bid for DHFL in January this year after a majority of the creditors voted for its bid over competitor Oaktree Capital.
Later in June, the National Company Law Tribunal too gave its approval for the plan. As per the timeline prescribed under the IBC, the transaction should have closed in the first week of September. However, challenges by multiple parties including the company's promoter have led to delays in closure.
DHFL will now be India's first financial services company resolved under a special window under the IBC. The housing financier was referred to bankruptcy proceedings by the Reserve Bank of India in November 2019.
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