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NCLT clears Piramal’s resolution plan for DHFL

Our Bureau Mumbai | Updated on June 07, 2021

Asks the Committee of Creditors to examine giving more money to small fixed deposit holders

After many a twist and turn, the debt resolution plan submitted by Piramal Group for Dewan Housing Finance Corporation Ltd (DHFL) has been finally approved by the National Company Law Tribunal.

DHFL is the first financial services company to get the NCLT nod under the insolvency process. The Committee of Creditors of DHFL had in January voted in favour of the resolution plan of Piramal Capital and Housing Finance Limited (PCHFL), a wholly-owned subsidiary of Piramal Enterprises Ltd.

According to the resolution plan, the total consideration for DHFL will be ₹37,250 crore, including an upfront cash payment of ₹12,500 crore and a deferred component of ₹19,550 crore.

“This is one of India’s largest IBC proceedings, and the very first in the financial sector. In that regard, it is an important and positive trendsetter. The approval from NCLT is a significant milestone in DHFL’s resolution and an affirmation of the sanctity of the IBC process,” a Piramal Group statement said.

Challenges ahead

According to sources, the Piramal Group is looking to complete the resolution process by August. However, it is likely to be delayed with many parties contemplating  approaching higher courts. DHFL’s erstwhile promoter, Kapil Wadhawan, has made an offer to take back control of the company and wants the top court to pass an order asking the CoC to vote on his proposal.

The NCLT’s Mumbai Bench, comprising HP Chaturvedi and Ravikumar Duraisamy, on Monday said the approval is subject to the Supreme Court decision on the petition filed by Wadhawan. The NCLT, however, dismissed a plea by Wadhawan, who had sought a copy of the successful resolution plan.

FD holders to move NCLAT

The other challenge could be from fixed deposit holders, who are demanding full payment under the debt resolution process. Vinay Kumar Mittal, a lead petitioner in the court on behalf of FD holders of DHFL, said they would be filing an appeal in the NCLAT. “We want 100 per cent payment. The moment the NCLT order is uploaded, we will be moving the NCLAT,” he told BusinessLine.

It is to be seen if other parties such as Wadhawan or 63 Moons Technologies take up a similar line of action.

Piramal Enterprises shares closed 1.87 per cent higher on the BSE at ₹1,960.75 a piece, while the DHFL scrip also rose  9.76 per cent to ₹20.8.

Published on June 07, 2021

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