Companies

CoC of DHFL vote against redistribution proposal

Surabhi Mumbai | Updated on June 23, 2021

Majority of financial creditors oppose redistribution of funds to small deposit holders

The Committee of Creditors (CoC) of Dewan Housing Finance Corporation Ltd (DHFL) are understood to have voted against the proposal for redistribution of funds to small deposit holders.

Sources said a majority of financial creditors including fixed deposit holders have voted against the proposal.

This will mean that the current distribution pattern for DHFL will continue. The Committee of Creditors is expected to move the National Company Law Tribunal on June 24 to apprise it of the voting results.

NCLT recommendation

Based on the NCLT recommendation, the CoC had proposed higher distribution of funds to small investors including fixed deposit and NCD holders and pension funds.

According to the proposal, the entire admitted claim of ₹39 crore of Army Group Insurance Fund, ₹72.93 crore of Air Force Group Insurance Society and Navy Children School of ₹2.54 crore would be paid fully in cash.

Also read: DHFL lenders begin voting on proposals to redistribute funds

Further, it was proposed that all fixed deposit holders will be paid additional amounts in cash in order to ensure that the entire amount paid to them is about 40 per cent of the admitted claims, similar to the recovery to secured financial creditors.

Unsecured NCD holders with investments up to ₹10 lakh were proposed to be repaid 40 per cent of the admitted claims like in the case of fixed deposit holders.

The total outgo for lenders of DHFL on these proposals would have been ₹1,853.21 crore.

Published on June 23, 2021

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