DHFL Manages To Make Only Partial Payment On Commercial Paper Dues
An advertisement board for Dewan Housing Finance Corporation Ltd. in Mumbai. (Photographer: Anirudh Saligrama/BloombergQuint)

DHFL Manages To Make Only Partial Payment On Commercial Paper Dues

Dewan Housing Finance Corporation Ltd. repaid only part of the commercial paper coming up for redemption on Tuesday, it said in a filing to stock exchanges.

According to the company’s statement, DHFL repaid 40 percent or Rs 150 crore of the Rs 375 crore in commercial papers falling due on June 25. Around 12 investors are invested in this commercial paper, the filing said, adding that investors have been paid on a proportional basis.

The remaining Rs 225 crore will be repaid in the next couple of days once the “surplus cash flow position improves,” the company said.

DHFL has been reeling under liquidity pressures since the collapse of Infrastrucrure Leasing and Financial Services in September last year. DHFL has been the worst hit by the crisis and has not been able to raise any fresh funds from the market or from banks, a senior company official told BloombergQuint on condition of anonymity.

The company has so far managed to raise money by securitisation of loans and sale of assets. DHFL said that it continues to sell down assets.

"The Company is already in the process of selling down its loan assets including wholesale project loans to make good all its obligations and maintain its 100 percent commitment to all its creditors as it has done since the liquidity crisis started  in September 2018," said Kapil Wadhawan, Chairman and managing director, DHFL in the exchange filing.

The company added that it has repaid CPs worth Rs 375 crore before today despite downgrades by rating agencies which anticipated that the company would default on its CPs before they had fallen due. Mutual funds, the statement said, have already taken a 100 percent markdown on their exposure to DHFL's CPs.

Overall the company has repaid Rs 41,000 crore in debt to its creditors and investors since last September.

Second Default

The default in CP payments on Tuesday is the second instance of delayed repayment by the housing finance company in recent weeks.

On June 5, DHFL had to repay Rs 962 crore in interest obligations on its non-convertible dentures. The company missed these payments due to shortage of cash. Subsequently on June 11 the company honoured its dues and repaid the full interest owed on its NCDs.

On May 11, DHFL halted any premature withdrawals of fixed deposits and stopped taking fresh deposits in order to manage its liquidity position better.

According to data available on Bloomberg, DHFL has over Rs 7,800 crore worth of principal and interest payments on bonds and non-convertible debentures coming due in 2019. Of this, Rs 5,479 crore is in the form of redemptions. Around Rs 4,800 crore worth of bond redemptions will take place in September, according to Bloomberg.

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