The Reserve Bank of India (RBI) has approved Piramal group’s plan for the takeover of Dewan Housing Finance Corporation Ltd (DHFL). The go-ahead from the central bank comes a month after the Piramal group, led by billionaire Ajay Piramal, won a bitterly contested bidding beating other rivals including Oaktree.
After the RBI’s approval, the committee of creditors (CoC) will now submit the Piramal’s plan for the approval of the National Company Law Tribunal (NCLT).
In a statement, Piramal group said “We understand that the RBI has approved the DHFL resolution plan from Piramal Capital and Housing Finance, submitted by the CoC.”
Piramal plans to merge its financial services business with DHFL and retain all employees. Piramal Capital and Housing Finance merger with DHFL will be effective from the date NCLT approves the plan.
As per Piramal’s plan, the existing shareholders of DHFL will get zero value. DHFL's lenders are to get Rs37,250 crore over the next five years.
Last month, the Indian public sector banks and other creditors had voted in favour of Piramal’s debt resolution plan for DHFL.
The bankrupt housing finance company has been in bankruptcy court since December 2019 after the company defaulted on debt worth Rs90,000 crore. State Bank of India (SBI) is the biggest lender having lent Rs10,000 crore. Other lenders include Bank of Baroda, Bank of India, Canara Bank, Union Bank of India, Syndicate Bank and National Housing Bank. The erstwhile promoters of the company are in jail.