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Indiabulls Housing Finance Ltd has recovered Rs 23 crore out of its Rs 100-crore loan exposure to the financially-troubled Deccan Chronicle Holdings Ltd. The recovery was made through auction of some of DCHL’s mortgaged properties.
Last year, IHFL had taken possession of two residential and three commercial properties mortgaged by DCHL after it defaulted on its loan repayments.
Higher market value “The market value of the properties (mortgaged to IFHL) is about ₹200 crore,” said Gagan Banga, Managing Director and Chief Executive Officer, Indiabulls Housing Finance.
Besides mortgaging properties, DCHL has pledged 83.3 lakh shares (amounting to ₹3.22 crore at Friday’s closing price of ₹3.87 a share on the BSE) with IHFL, he said.
Indiabulls took possession of the properties under the Sarfaesi Act .
Legal options
Indiabulls, as well as other lenders, are pursuing recovery actions against DCHL through various legal options including Section 138 of the Negotiable Instruments Act, 1881, and The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002.
According to DCHL’s balance sheet, as of March 31, 2013, it owes ₹3,914 crore to its lenders.
Financial institutions, including Axis Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, Tata Capital, IFCI and Jammu and Kashmir Bank, have approached courts to recover loans granted to DCHL.
On the possibility of further recoveries, Banga said, “Since the matter is sub judice , it is difficult to establish the precise timeline. But, as a matter of abundant caution, our company has fully provided for these loans and has informed the authorities of the fraud committed by the promoters.”
Though lenders have turned the heat on the debt-laden firm, Deccan Chronicle Holdings is surviving because of the cash flows generated from the publication’s advertising revenue.
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