“Give me my money back!” ~ DHFL debt investors
We are
all asking “DHFL, when will I get back my money?”
Article published as on
Monday, 19th April, 2021 at 8:00 a.m.
Under the current scenario of
the resolution plan in DHFL
A
person holding 2.5 lacs worth
NCDs gets a recovery of 40% meaning 1
lac.
Whereas
person holding NCD worth 2 lacs
full amount of 2 lacs.
For
FD holders it's even worse
A
person holding 5 lac worth of FD
would recover just 25% which is 1.25
lacs
And a person holding 2 lacs worth of FD would receive
the full amount of 2 lacs.
(Above recovery scenarios for
NCD are confirmed by catalyst debenture trustee.)
This is such an injustice to
small investors.
With
the current scenario of DHFL, I wondered is there a better way by which FD/NCD
investors and other creditors could recover more of their money
I propose a better resolution
plan where:
·
New management should be appointed to run the company. With the
target of being a profitable and growing company.
·
The company should have a target of becoming a dividend-paying
company in 5 years.
·
DHFL should also target becoming 3rd largest HFC in India (1st
HDFC, 2nd Lic hsg fin)
And
·
Every creditor (banks/NCD holders/FD holders) get up to 2 lacs
in cash immediately.
·
And the balance amount due (including additional interest) be
converted into shares of DHFL at a face value of 10 Rs.
·
Those with dues above 1 crore should get lock-in shares for 5
years (meaning they cannot be traded on the stock exchange)
In
this manner, banks and other large institutions cannot rush to sell their
shares which could depress the share prices.
·
While investors up to the amount of 1 crore can sell their
shares on the stock exchange.
This
gives immediate liquidity to the investors.
·
And those willing to hold shall be rewarded with dividends and
capital appreciation.
·
Equity investors should be given rights issue, 10 rights for
every share... In this manner equity shareholders would also benefit by
maintaining ownership and the company would also get capital.
In
this manner, no creditor and investor will face a huge loss. And recover most
of their money.
In
the current proposed resolution scheme of Piramal, every creditor holding above
2 lacs will get only 40% dues.
(This is based on public information. there is
still a lack of clarity and ambiguity in the resolution plan, also the
debenture trustee is not having proper communication with the small investors
regarding the same, they have filled intervening application but as on now 40%
and 25% for NDC and FD holder above 2 lacs is the expectation)
Instead,
if the ownership of DHFL is given to the debtholder the recovery of fraud money
will come directly to the company and thus benefitting shareholders and not the
Piramal as is the case now.
This seems a solid plan but
how to communicate it and propose this idea?
Well,
we can be part of the committee of creditors and propose this idea.
Meetings
of COC are called by the administrator appointed by RBI (here in this case
administrator is Shri R. Subramaniakumar)
How to reach and contact the
administrator?
Here
is the mail Id given on circular notice to the exchange by DHFL
(I
have written the mail to the administrator, but as the resolution process is
almost over there is little to no hope left for any better deal)
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