Lenders to beleaguered housing finance unit Dewan Housing Finance Ltd (DHFL) will sign an inter-creditor agreement (ICA) by July 5 to begin work on restructuring plan.
The case will be dealt under Reserve Bank of India's new June 7 circular for restructuring stressed assets.
Lenders have set the reference date for DHFL as June 29. This is the starting point for the 30-day review period according to regulatory norms. ICA is to be executed by all lenders by July 5. Thereafter, lenders will consider the resolution plan given by company, bankers said.
Bankers said bank representatives held the first round of discussions on Monday. They discussed the status of account and tentative steps like part conversion of debt and buying of some loans of the Wadhawan family controlled entity. The plan also includes roping in new investors and getting promoters to cede management control.
Key lenders to DHFL include Union Bank, State Bank of India, Bank of India and Bank of Maharashtra. The company has a debt of over Rs 90,000 crore.
Private capital firms like AION Capital, a joint venture between ICICI Venture and Apollo Capital Management, and Lone Star are among the players looking for a stake in DHFL. Oak Tree Capital is amongst those who are in talks to buy wholesale portfolio.
Bankers said public sector banks have maintained that timely resolution in DHFL is important for the system, since liabilities are huge. Generation of additional liquidity will depend on timely fructification of efforts made by DHFL including sale of investments, induction of strategic investor and asset pool sell-downs.
Another aspect being looked at is making some of DHFL's asset performing. Some of the projects to which DHFL had lent are facing a host of problems — delay in execution, overextended developers, and inability to execute a sale.