Piramal Enterprises on Friday said its subsidiary, Piramal Capital & Housing Finance Limited (PCHFL), has merged with debt-ridden Dewan Housing Finance (DHFL) after paying Rs 34,250 crore to the creditors of the troubled housing finance company.
PCHFL has merged into DHFL with effect from September 30, 2021 pursuant to the reverse merger as contemplated under scheme of arrangement provided under the resolution plan, Piramal Enterprises said in a regulatory filing.
"Consequent to the Reverse Merger, DHFL shall issue such number of equity shares to the shareholders of PCHFL i.e. to Piramal Enterprises Limited (PEL), in accordance with the scheme of arrangement provided under the resolution plan," it said.
Upon allotment of equity shares to PEL, DHFL will become a wholly-owned subsidiary of PEL, it said, adding, Piramal Enterprises Limited will acquire 100 per cent of the equity share capital in DHFL.
"The acquisition is in line with a strategic roadmap to transform and expand Group''s financial services business. The acquisition provides an inorganic growth opportunity to the company and leverages operating synergies," it said.
In January 2021, 94 per cent of the creditors of DHFL voted in favour of Piramal Group's resolution plan under the Insolvency Bankruptcy Code (IBC).
In November 2019, RBI had referred DHFL -- then the third-largest pure-play mortgage lender -- for resolution under the Code.
It was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC.
DHFL had gone bankrupt with more than Rs 90,000 crore in debt to various lenders, including banks, mutual funds and individual investors who kept fixed deposits with the company.
