The National Company Law Tribunal (NCLT), on Monday (June 7, 2021), approved the Piramal Group’s bid for bankrupt DHFL, subject to certain conditions.
NCLT’s order also rejected the former DHFL promoter, Kapil Wadhwan’s plea seeking a copy of the successful resolution plan. Kapil Wadhawan is accused in Yes Bank- DHFL loan bribery case.
The Tribunal, in its order, asked the Committee of Creditors (CoC) to consider giving more money to small fixed deposit holders under the approved resolution plan.
“We are not remanding the plan back to CoC, we respected their commercial wisdom”, the bench added.
The NCLT’s Mumbai bench chaired by HP Chaturvedi and Ravikumar Duraisamy said the approval is subject to the final ruling from the National Company Law Appellate Tribunal (NCLAT) and the Supreme Court’s judgment on Kapil Wadhwan in the matter.
On May 19, the NCLT had asked lenders to consider an offer made by Kapil Wadhwan, which lenders found ineligible to be voted on. They appealed against the order to the National Company Law Appellate Tribunal, which ruled in favor of the lenders. Wadhwan has since approached the Supreme Court. The Supreme Court is likely to hear the matter on Tuesday, June 8.
DHFL is the first company to get an NCLT nod under the insolvency process.
DHFL had gone bankrupt with more than Rs.90,000 crore in debt to various lenders, including banks, mutual funds, and individual investors who kept fixed deposits with the company.
DHFL had been referred for resolution by the RBI in November 2019 after it failed to meet its liabilities and promoters came under investigation.
Piramal’s wholly owned subsidiary Piramal Capital and Housing Finance had proposed a resolution plan of Rs. 37,250 crores to acquire DHFL, which includes an upfront cash payment of Rs.12,500 crore and a deferred component of Rs.19,550 crore.
The Committee of Creditors of DHFL had in January voted in favor of the resolution plan of Piramal Capital and Housing Finance Limited under the Insolvency and Bankruptcy Code.
Piramal Group welcomed the order, and said it looks forward to a speedy culmination of the resolution process.
“We are pleased with the judgment today approving our resolution plan for DHFL. This follows the endorsement of 94% of lenders, and the subsequent approvals from RBI and CCI, and reiterates the strength and quality of our bid”, the Piramal Group said.
“This is one of India’s largest IBC proceedings and the very first in the financial sector. In that regard, it is an important and positive trendsetter for the future. The approval from NCLT is a significant milestone in DHFL’s resolution and an affirmation of the sanctity of the process”, they added.
The NCLT also ruled on the National Housing Board’s case on Monday (June 7, 2021) and held that NHB’s money given to DHFL shall be considered as trust money and shall be returned to NBH.
