MUMBAI: Dewan Housing Finance Corporation (DHFL) on July 15 reiterated that it was working with lenders to arrive at a “comprehensive resolution, without any haircut to the lenders,” in a media release.
DHFL said media reports had amplified its concern expressed in the notes to account about continuing as a “going concern” and urged that the statement be read in its entirety.
“The entire set of management notes are the basis (of) our intent to be prudent and conservative in adequately providing for in our results,” DHFL said on the notes to account published along with its fourth-quarter results on Saturday. DHFL posted a net loss of Rs 2,223 crore in the fourth quarter of the last financial year due to a whopping provision of Rs 3,280 crore and a net loss of Rs 1,036 crore for the full year.
The stock tumbled 30 per cent and closed on BSE at Rs 48.50, down Rs 19.95 from the previous close or 29.15 per cent down to the lowest level in 10 years. The stock has had a free fall from its 52-week high of Rs 690 in September 2018, hit by the credit market crisis.
“While the sectoral stress is well-known for months, DHFL has withstood intense pressure and continues to remain strong and solvent. DHFL has also cleared a significant amount of obligation to the tune of Rs 41,800 crore since September 2018,” the company pointed out. While the statement on its ability to continue as “going concern” is part of the accounting disclosure, the overhang of debt and its ability to service them have made investors nervous.
DHFL on Saturday said it was in advanced stages of submitting its resolution process and banks were drawing up the inter-creditor agreement. DHFL had skipped interest payments on NCDs and partial repayment of CP, leading to “default” after the company was also downgraded by rating agencies.