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.
