NEW DELHI: The debt-ridden Dewan Housing Finance Corporation Ltd (DHFL) has got approval from Securities and Exchange Board of India (SEBI) to exit its mutual fund business by selling its 50 per cent stake to joint venture partner Prudential Financial.
“We are happy that we have received the final approval from SEBI. We will now need to complete a few more formalities including giving a load-free exit window to investors in line with the SEBI requirement for change in control and other fundamental attribute changes,” said Ajit Menon, CEO of DHFL Pramerica MF. The deal is expected to be completed by the end of July or early August. “We will be 100 per cent owned by Prudential Financial Inc US and a part of their global investment management business, PGIM Inc. It is tenth largest asset manager with a 140-year legacy,” Menon said.
Earlier on Wednesday, some of the top DHFL executives met Ministry of Corporate Affairs officials to apprise them about the liquidity situation at the NBFC.
Crisis-hit DHFL has been the first casualty of the ongoing NBFC liquidity crisis and was hit by one controversy after another in the last couple of months, followed by defaults and delays. This month alone, it has defaulted on repayment obligations for a second time, setting into motion a further crisis at the already embattled NBFCs. On Tuesday, DHFL was unable to make full payment on its maturing commercial papers.
It made partial payment of Rs 150 crore on a proportionate basis, while assured that balance Rs 225 crore will be paid to investors in next two days.
Also on June 4, DHFL defaulted on interest payments worth Rs 850 crore on its non-convertible debentures, following which its credit rating was downgraded to default or “D” by rating agencies CRISIL and ICRA. However, the mortgage lender was able to pay the interest within the seven-day period given by bondholders.