EPFO to seek early redemption of investments from DHFL, may not join ICA

Surabhi Mumbai | Updated on September 25, 2019 Published on September 25, 2019

File photo   -  THE HINDU

DHFL to hold meeting with bank lenders on Wednesday

Concerned about the safety of retirement savings of workers, the Employees’ Provident Fund Organisation (EPFO) will ask for early redemption of its investments from Dewan Housing Finance Corporation Ltd (DHFL). It may not join the inter-creditor agreement (ICA) with other lenders.

“EPFO does not consider itself to be a lender. It is an investor in DHFL. The issue has been discussed at length in the Central Board of Trustees (CBT) already,” said a person familiar with the development.

Since it is entrusted with the savings of workers, the retirement fund manager is keen that its dues are settled first by DHFL, which is in the midst of a resolution process.

Prabhakar Banasure, a member of the CBT and its sub-committee Finance, Investment and Audit Committee said it will be meeting soon. “The FIAC is likely to meet next week again where the DHFL issue will be taken up. The agenda for the meeting is being finalised,” he told BusinessLine.

The EPFO has a total of about Rs 1,300 crore of investments in bonds of DHFL and is seeking early redemption of the funds. According to estimates about Rs 900 crore of the investment can be recalled of which DHFL has repaid more than Rs 200 crore. The EPFO is understood to have asked the housing finance company for early redemption of this.

“We are giving top most priority to investments in not only DHFL but a number of other investments to ensure that retirement savings of workers are protected,” said another member of FIAC adding, that it is exploring options for early recovery of the funds.

DHFL to meet institutional creditors on September 27

DHFL is set to meet bank lenders on Wednesday and institutional creditors on September 27 to discuss the draft resolution plan. Banks have urged the Securities and Exchange Board of India (SEBI) to relax norms for mutual funds to sign the inter creditor agreement and ensure participation by debenture holders in the process as they to get the resolution process.

As at March-end 2019, DHFL had total borrowings (other than debt securities) of ₹ 40,604 crore, including term loans from banks aggregating ₹ 31,759 crore.

Its total liabilities also include debt securities (primarily funds raised via non-convertible debentures) of ₹ 45,379 crore and deposits aggregating ₹ 6,588 crore.

DHFL scrip was trading about 5.46 per cent up in intra-day trade on the Bombay Stock Exchange (BSE) on Wednesday.

Published on September 25, 2019
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