New Delhi: Piramal Enterprises on Wednesday said that it has completed the acquisition of Dewan Housing Finance Ltd (DHFL) by paying Rs 34,250 crore to the creditors of the beleaguered housing finance company. The creditors of DHFL, including fixed deposit (FD) holders, would recover an aggregate amount of Rs 38,000 crore from the resolution process of DHFL.
Giving details of the transaction, Ajay Piramal chairman, Piramal Group, in a virtual press conference said the total consideration paid by the group, of around Rs 34,250 crore at the completion of the acquisition, includes an upfront cash component of Rs 14,700 crore and issuance of debt instruments of Rs 19,550 crore (10-year NCDs at 6.75 per cent per annum on a half-yearly basis). Besides an amount of Rs 3,800 crore is the entitlement of creditors as per the resolution plan from the cash balance available with DHFL.
There were 70,000 creditors of DHFL and most of them are recovering nearly 46 per cent of their pending dues through the successful completion of the resolution process, a statement from Piramal Enterprises said.
As a part of the process, Piramal Capital and Housing Finance Ltd will merge with DHFL. The merged entity will be called Piramal Capital and Housing Finance Limited and would be 100 per cent owned by Piramal Enterprises Limited. Piramal said that at an appropriate time, the merged entity would apply to the RBI for a deposit taking licence.
The merger will take place in the next two weeks, Piramal said.
The merged entity combines Piramal’s financial strength with DHFL’s geographic footprint and distribution network of 301 branches and 2,338 employees catering to one million lifetime customers across 24 states. The retail asset under management of the merged entity will increase by nearly five times and lending will be 50:50 to the retail and wholesale mix in the near future and two-thirds to one-third in the medium term, Piramal said....