Breather for bond investors in DHFL

Mumbai: Bond investors in Dewan Housing Finance Corp Ltd (DHFL) can breathe easy for the next two months at least as the promoter of the nonbanking financial company (NBFC) has received more than Rs 2,000 crore from Blackstone for the sale of Aadhar Housing Finance, said people with the direct knowledge of the matter.

DHFL shares, which have fallen 23 per cent in the past month, jumped 7.19 per cent to close at Rs 89.50 on the BSE Monday.

“We have received about Rs 2,200 crore via the Aadhar stake sale, of which a portion will go to DHFL,” chairman Kapil Wadhawan told ET, confirming the development but declining to give details. “Once we clear our technical delays (on bond interest payments), we will go back to rating companies seeking an upgrade.”

About Rs 500 crore of the sum credited is expected to go to DHFL.

This will enable the embattled home financier to pay off debt obligations this month and the next, said one of the persons cited above.

Promoter Wadhawan Global Capital, which will be entitled to more than half the money from the unit’s sale, will use the cash to cut debt, said another person. The holding company had raised Rs 1,600-1,700 crore to acquire 50 per cent stake in DHFL Pramerica Life Insurance more than two years ago. DHFL has been seeking to offload assets to make payments on total borrowings of about Rs 1lakh crore.

“It is important to start our new lending activity using our underwriting skills as we are already in talks with select banks for credit lines,” said the chairman.

The company has payment obligations exceeding Rs 2,000 crore coming up in June and July.

DHFL has been squeezed by the liquidity crisis at NBFCs that was triggered by the shock default on repayments by Infrastructure Leasing & Financial Services in September last year. The chairman said DHFL will honour all obligations as it’s extending loan portfolio sales along with the disposal of strategic stakes.

Since September, DHFL has raised nearly Rs 40,000 crore of retail and builder loan portfolios, the chairman said. It has been generating about Rs 2,000 crore every month through repayments by home buyers who make equated monthly installment payments on time.

The home financier raised about Rs 350-400 crore on Friday through portfolio sales, using the proceeds to meet immediate debt obligations, ET reported on June 8. While Rs 100 crore went to investors in commercial papers due for redemption on Friday, the rest was used to pay interest on bonds and some fixedmaturity schemes. Earlier last week, the housing finance company failed to pay nearly Rs 1,000 crore interest on bonds sold about a year ago. Later, it paid out a small portion of that obligation.

“The remaining interest payment estimated at about Rs 850 crore should now be paid off,” said an investor holding DHFL bonds. The company is expected to make this payment in the next 2-3 days, failing which it will be in default. On Monday, it paid a token Rs 45 crore as bond interest.

On June 19, the company is supposed to pay off another small debt to pension funds. In the past two weeks, rating companies including Icra, Crisil and CARE have downgraded DHFL debt securities to D or default, citing delays in interest payments.