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The financial crisis is deteriorating day by day, with the DSP Mutual Fund (DSP MF) suing Dewan Housing Finance Corporation (DHFL) for debt collection, the Business Standard reports.
Value Research data showed that DSP exposures in the DHFL as at April 30 were worth Rs. 169 crore mainly in non convertible debentures (NDCs).
Moneycontrol could not check the report independently.
This decision is expected to have a negative impact on the ongoing resolution process of the DHFL with Union Bank (a key lender), which the company must bring before a consortium of lenders, the report said.
According to a source citing a source, unlike banks, MFs could turn to the courts because they are not bound by creditor agreements (CREAs).
An ICA expresses its consent to finding a solution in case of default and was mandated by the Reserve Bank in a circular of 7 June.
Although DSP could not be reached, DHFL did not answer Business Standard questions on the subject.
In accordance with the resolution plan in preparation, DHFL would initially pay unsecured individual creditors and then secured creditors in full. The resolution committee suggested a new monthly credit of Rs. 1,000 to Rs. 1,500 per month, with an extension of the terms of existing loans, if any, the report said.
Banks would also be allowed to convert their debt into shares with a cap of 10%, he added. The proposed resolution could also include a "moratorium" of 6 to 12 months for principal repayment, he added.
At the end of September 2018, the DHFL had contributions of Rs. 440,000,000 to secured lenders (including CDNs) and an outstanding principal of Rs. 4,770,000,000.
At the end of March 2019, the company was in default of payment on bank loans of 40,600 rupees and debt securities of 45,380 rupees. Not sure exactly which mutual funds to buy? Download the Moneycontrol transaction app to get personalized investment recommendations.
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