DHFL lenders set to vote on giving more to small investors

Mumbai: Lenders To DHFL will vote on a proposal to distribute up to Rs 1,853 crore more to smaller investors and retirement funds in the bankrupt housing finance company this week. This complies with the NCLT's order that asked lenders to consider giving a higher amount to smaller investors.

Between what was approved by the committee of creditors earlier and the proposed distribution mechanism, lenders will have to shell out Rs 1,853 crore, which is around 5.4% of the resolution plan value.

The resolution proposes to pay the Army Insurance Group Fund, Air Force Group Insurance Society and The Navy Children's School in full as suggested by the NCLT. This will result in an additional Rs 86-crore outgo for lenders.


It also proposes that all fixed deposit holders get 40% of their admitted claims, which is in line with the recovery for secured creditors resulting in an additional payout of Rs 965 crore. In terms of the approved resolution plan, FD holders would have got a pittance as they are dissenting creditors and entitled to only their share of liquidation value. In case of non-convertible debentures, lenders have proposed creating four categories based on the size of the investment. The resolution proposes investors up to Rs 10 lakh as well as retirement funds be paid 40% of their admitted claims even if they do not qualify for it.