DHFL clears Rs 961 crore interest on NCDs
The company has made interest payments in lieu of Rs 961 crore as committed to its debenture holders.
Mumbai: Mortgage lender Dewan Housing Finance Ltd (DHFL) on Tuesday said that it has cleared interest of Rs 961 crore due on non-convertible debentures (NCDs) and would be seeking a rating upgrade from agencies. It also sold its entire stake in Aadhar Housing Finance to private equity firm Blackstone and it reportedly intends to use the entire proceeds in debt payments.
DHFL in a regulatory filing, said, “DHFL today confirms that the company has made full payment towards interest payable on Secured Redeemable NCDs issued by way of public issue within the cure period of seven working days. The company has made interest payments in lieu of Rs 961 crore as committed to its debenture holders.”
“Since September 2018, the Company has managed to make liabilities payment of over Rs 36,000 crore without availing any fresh funding from any lender. The company reaffirms that they are committed to meeting all future debt servicing obligations in a timely manner, through further asset monetisation plans as well as on-boarding of a strategic partner for its business,” DHFL said.
On June 4, DHFL failed to make interest and principal payments that were due. DHFL has received rating downgrade on its Rs 850-crore worth commercial papers (CPs) to default grade by Crisil and ICRA due to delay in meeting its obligations.
Fitch Ratings earlier said DHFL's liquidity problems and its reported failure to pay coupons highlight the funding challenges faced by non-banking financial companies…The funding models of housing finance companies and loan companies, which have become increasingly reliant on short-term funding to fund longer-term assets, have been particularly affected by the liquidity squeeze.
In May, DHFL stopped taking new deposits and blocked premature withdrawals following a credit rating downgrade, as the National Housing Bank, which regulates mortgage finance companies, does not allow firms to raise deposits if they do not have an investment grade rating.
According to reports, DHFL will use the Rs 500 crore it got from selling 9.15 per cent stake in subsidiary Aadhar Housing Finance towards payment of bonds. The promoter of Aadhar Housing—Wadha-wan Global Capital (WGC), DHFL, Kapil Wadhawan, Dheeraj Wadhawan and Aruna Wadhawan, who all formed part of promoter and promoter group of DHFL—have completely exited Aadhar from June 10 for about Rs 2,200 crore.
Aadhar is a key player in the affordable housing finance segment. DHFL shares closed up 0.50 per cent at Rs 89.95 on the BSE.