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DHFL defers Q4 results, shares plunge more than 11%

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MUMBAI: Shares of Dewan Housing Finance Limited (DHFL) crashed more than 11% on Friday after the mortgage lender postponed the release of its fourth-quarter result by a fortnight even as it is working with strategic investors for partnership and more securitisation deals to meet repayments. Cash-strapped DHFL said it will now announce the March quarter earnings on July 13.

It said it is postponing the results “in light of certain unforeseen operational engagements, including nonavailability of a few directors”. The company has been facing liquidity crisis and has recently defaulted on repayment obligations. “DHFL is in final stages of due diligence and is likely to announce a strategic partnership in next 15 days,” said the source. It is selling portfolios to meet its debt obligations till fresh funding resumes.

DHFL reported a net fixed deposit outflow of Rs 1,356 crore between September 24, 2018, and December 31, 2018. Earlier this week, DHFL had defaulted on payment of unsecured commercial papers.

It had managed to meet only 40% of its Rs 375-crore repayment commitment towards commercial papers, highlighting cashflow stress, forcing it to sell assets to repay debt. The company’s dependence on short-term borrowings through commercial papers has declined with the amount of outstanding reducing to Rs 850 crore as on May 10, 2019, from Rs 8,715 crore as on September 30, 2018. “The intent is there to pay, but market is not supporting them.

A strategic investor or the existing lenders to the company will have to allow some changes to the repayment schedule,” said a source close to the development. DHFL has sold two subsidiaries —Aaadhar Housing Finance and Avanse — an education loan company, to meet repayment obligations.

The company had entered an agreement with Prudential Financial to divest its 50% holding in DHFL Pramerica Asset Managers (DPAMPL) — 17.12% held directly and 32.88% held by its wholly-owned subsidiary, DHFL Advisory - Investments.

Since September last year, the company has repaid Rs 35,000-40,000 crore debt obligations.




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