DHFL REPORTS Q2 NET LOSS OF ~242 CR

Debt-ridden housing finance firm DHFL on Thursday reported a consolidated net loss of ~242.48 crore for the second quarter (Q2) of the current financial year.

The company had posted a net profit of ~431.71 crore in the corresponding July-september period of 2018-19. DHFL said the losses registered in Q2 of this financial were fully attributable to owners of the parent (company). Total income fell to ~2,399.84 crore during the three months to September, as against ~3,154.25 crore in the year-ago period, it said in a regulatory filing.

DHFL said the company is undergoing substantial financial stress since the second half of the previous financial year. The firm has suffered consistent downgrades in its credit ratings since February 2019.

"On 5th June 2019, the credit rating was reduced to default grade despite there being no default till that date. As a result, the company’s ability to raise funds has been substantially impaired and the business has been brought to a standstill with there being minimal/virtually no disbursements,” it said.

Further, the firm has reached out to lenders for timely intervention and to restore the ability to carry on its business and they responded by agreeing to work on a plan under the RBI guidelines on resolution of distressed assets. “Ability of the company to continue as a going concern may be assessed in the back drop of these developments,” it added.

Based thereon, an indicative debt resolution plan has been submitted by the company which identifies liabilities of DHFL aggregating to ~48,826 crore, constituting 58 per cent of the total debt of DHFL, as sustainable debt, it added.

DHFL says the firm is undergoing substantial financial stress since the second half of the last financial year