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Moving ahead with the resolution plan, the Board of Directors of Dewan Housing Finance Corporation Ltd (DHFL) has approved a proposal to convert the whole or part of its debt into equity shares or other securities, which could “result in a change in ownership of the company”.
It has also decided to amend the Memorandum of Association, or Articles of Association of the Company, for the alteration in share capital and appointment of nominee directors.
In its meeting on Friday, the board approved proposals to increase the share capital, avail additional credit facilities and also dispose of whole or part of the assets of the company.
Also read:DHFL lenders eye 51% stake in troubled NBFC
“Based on extensive discussions with the lenders on the draft Resolution Plan, the board considered it necessary to approve certain actions as enabling actions, and has accordingly, subject to further consents/approvals as may be required under applicable laws, subject to the approval of the shareholders of the company where required, approved the following,” DHFL said in a regulatory filing.
As part of the resolution plan being worked out, the lenders to cash-strapped DHFL are likely to convert debt to equity and take 51 per cent equity stake in the company — until they find a strategic investor. This is likely to be done by converting a part of the debt to equity.
“The board also expanded the terms of reference of the Special Committee for Resolution Plan to include the finalisation of the terms of conditions of the various measures and actions contemplated by the Resolution Plan as stated above, and to sign/execute necessary documents to give effect to the Resolution Plan,” it said.
Also read:DHFL crisis: The ‘hidden’ issues no one is talking about
The authorised share capital of the company will now be increased to 1,090.39 crore shares from 828 crore shares. This will be done through an increase in the number of equity shares to 84.03 crore shares of a face value of Rs 10, each as against the current 57.8 crore equity shares of face value of Rs 10 each.
The number of non-convertible redeemable cumulative preference shares, which make a part of the authorised share capital will remain the same at 25 lakh of Rs 1,000 each.
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