The Piramal group completes the acquisition of DHFL for a total amount of 34,250 crore
The Piramal group announced on Wednesday that it has completed the acquisition of the housing finance company Dewan Housing Finance Corporation (DHFL) and full consideration of ??34,250 crore was paid for the same. As part of this process, Piramal Capital and Housing Finance Ltd (PCHFL) will merge with DHFL.
The group said in a statement that most of DHFL’s creditors were recovering nearly 46% through the resolution. DHFL’s creditors (including FD holders) would recover a total amount of approximately ??38,000 crore of DHFL resolution process.
This amount includes ??34,250 crore payable by PCHFL in the form of a combination of cash and non-convertible debentures in an amount of approximately ??3,800 crore, which corresponds to the creditors’ right (according to the resolution plan), from the cash balance available with DHFL.
In January 2021, 94% of DHFL’s creditors voted in favor of Piramal’s resolution plan. Approvals were also obtained from the RBI, the CCI and the NCLT to carry out this operation. The merged entity will be 100% owned by Piramal Enterprises Limited.
There were approximately 70,000 DHFL creditors and most of them recover nearly 46% of their overdue dues through the successful completion of the resolution process. The total consideration paid by the Piramal Group upon completion of the acquisition includes an initial cash component of ??14,700 crore and issuance of debt instruments ??19,550 crore (10-year MNT at 6.75% per annum on a semi-annual basis).
The acquisition marks the first successful resolution under IBC’s path in the financial services industry. In terms of value, the transaction is among the most important resolutions to date, setting a precedent for future resolutions in the industry, added Piramal Group.
“The acquisition will now provide an India-wide infrastructure with an extensive branch network as well as a significant customer base that will take advantage of the technology-driven multi-product retail digital lending platform.” did he declare.
The company will provide services such as used car and two-wheeler loans; student loans for professional and online courses; financing of small builders to meet construction financing requirements; unsecured business loans; personal loans and securities loans.
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