InvestorQ : Is it true that DHFL wants to pay out the creditors in full? Does that mean the stock is worth buying at the current price?
Ria Jain made post

Is it true that DHFL wants to pay out the creditors in full? Does that mean the stock is worth buying at the current price?

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Anu Biswas answered.
1 year ago
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While the company has offered to repay creditors 100% over a period of time, it comes with stiff conditions that may not be acceptable to most of the creditors because as a precondition, DHFL insists that all creditors should accept the inter-creditor agreement (ICA) that it has signed with the banks. Under the ICA, the debt will be repaid over a longer time frame of 8-10 years. In the interim, the company will be seeking additional funding to revive the business, which is where the existing creditors are uncomfortable. Secondly, the company wants to offer specific asset tags that will hypothecated against specific these liabilities but here again creditors are wary about the asset liability mismatch and the ability of DHFL to raise long term funds on a sustained basis.

As of now, apart from banks, other creditors are not willing to accept the ICA. Until this issue is resolved, it will be hard for the company to be able to offer any kind of respite. It is not a very wise decision to buy the stock at this point of time as it is too speculative. You can wait for clarity on this resolution plan and only buy the stock once there is clarity, even if you have to buy the stock a tad higher.

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