August Attorneys LLP
Jun 7, 2021
The National Company Law Tribunal has approved Piramal Capital & Housing Finance Ltd.’s resolution plan for Dewan Housing Finance Corp., subject to certain conditions.
“Resolution applicant's amount to stay same. Only inter-se allocation to be reconsidered. Following ruling in Essar Steel Ltd., expect gestures from Committee of Creditors. But cannot substitute their wisdom,” the Mumbai bench of the tribunal said. The NCLT’s detailed order is awaited. The Piramal Group has offered Rs 37,250 crore to DHFL’s creditors. This includes Rs 12,700 crore in upfront cash, Rs 3,000 crore in interest income already on DHFL’s books, as well as Rs 19,550 crore worth of non-convertible debentures to be repaid over 10 years.
Even as Piramal Group’s resolution plan was pending the NCLT approval, DHFL’s promoter Kapil Wadhawan had offered a settlement proposal. On May 21, the NCLT had directed DHFL’s committee of creditors to consider and vote on Wadhawan’s settlement proposal within 10 days. Also Read: Why NCLT Asked Wadhawan’s Offer To Be Put To Vote This direction was stayed by the National Company Law Appellate Tribunal on May 25. Subsequently, Wadhawan has challenged the appellate tribunal’s decision before the Supreme Court. Also Read: NCLAT Has Closed All Rights, Kapil Wadhawan Tells Supreme Court Besides Piramal Group’s plan, the NCLT also ruled on National Housing Bank’s case on Monday.
NHB’s advance to DHFL is a trust money and should be returned to NHB Trust, the tribunal said. NHB had asserted its right to receive proceeds from the resolution process on a preferential basis. It had argued that any sum received by the insolvent NBFC in repayment or realisation of loans and advances against which refinance has been availed by DHFL from NHB shall, to the extent of refinance granted and remaining outstanding, be deemed to have been received by DHFL in trust for NHB and shall be paid to it.