Debt-laden shadow bank Dewan Housing Finance Corporation Ltd (DHFL) on Tuesday said its creditors would not have to take any haircuts on principal payments under its resolution plan, sending shares up as much as 10 percent.
As part of the resolution plan, DHFL will also put a moratorium on repayments and seek funding from banks to start retail lending, the company said after a meeting of the special committee for resolution plan.
DHFL, the fourth-biggest housing finance company in India, has roughly Rs 1 trillion ($14.15 billion) of debt and is in the process of seeking lender approval on a restructuring designed to help it ride out a liquidity crunch and restart its lending business.
The shadow bank also said in a separate statement its auditor Deloitte, Haskins & Sells LLP had resigned, citing irregularities in DHFL's financial statements for the year ending March 31.
Last month, DHFL filed its long-delayed audited results for the quarter ended March 31, and revealed that its auditors had raised several red flags around its numbers.
The resignation of auditors comes at a time when the country is staring at a severe cash crunch in the non-banking financial space after a default by Infrastructure Leasing and Financial Services Ltd last September spooked investors and triggered a massive sell-off.
As of 12:55 pm, DHFL shares were trading 7.4 percent higher at Rs 45.05 on Tuesday. They have fallen 83 percent this year, as of the previous close.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Prajwal Revanna's father in custody for alleged kidnapping and sexual abuse
May 4, 2024 7:53 PM
Delhi, Indore, Surat and Banswara — why these are the most challenging domains for Congress internally
May 4, 2024 1:53 PM
Congress nominee from Puri Lok Sabha seat withdraws, citing no funds from party
May 4, 2024 12:00 PM
Lok Sabha Polls '24 | Rahul Gandhi in Rae Bareli, why not Amethi
May 4, 2024 9:43 AM