DHFL may buy back mutual fund bonds at discount
Dewan Housing Finance Corp Ltd (DHFL) may offer to buy back bonds held by mutual funds at a discount to ensure near unanimity among lenders and allow an exit to those unwilling to be a part of the banks-led resolution process. Big banks, who are driving the resolution process as part of the RBI circular dated June 7, are keen to have MFs on board to ensure smooth passage for the plan proposed by the DHFL management. While banks and other lenders can garner the support of about three-fourths of the lending entities even without the backing of mutual funds, they want to avoid legal tangles that may crop up later. Also, some of the lenders such as insurance and pension funds — which had initially approved the banks-led intercreditor agreement (ICA) — are said to be having second thoughts.
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