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Dewan Housing Finance board OKs debt-to-equity conversion, asset sale plans

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Dewan Housing Finance board OKs debt-to-equity conversion, asset sale plans

Dewan Housing Finance Corp. Ltd.'s board approved proposals to convert all or part of the troubled company's debt into equity shares, increase its authorized share capital and sell assets as part of its proposed resolution plan.

The proposed conversion of debt into equity may result in a change in ownership, the company said Aug. 30, adding that the plan is still subject to approval of shareholders during their annual general meeting Sept. 28. Further, the proposals would allow the company to increase its authorized share capital to 10.90 billion Indian rupees from 8.28 billion rupees, sell assets and avail additional credit facilities based on the existing borrowing limits to turn its business around.

The announcement came after lenders to Dewan Housing Finance reportedly agreed on a three-level resolution plan that involved converting a portion of the company's roughly 800 billion rupees debt into equity, conversion of some loans into nonconvertible debentures, as well as plans to loan fresh funds.

As of Aug. 30, US$1 was equivalent to 71.55 Indian rupees.