The draft resolution plan will be subject to approval of investors and lenders.

Crisis-hit shadow bank Dewan Housing Finance Ltd (DHFL) has submitted a draft resolution plan proposing to convert debt to equity while seeking to sell assets and raise more capital.

DHFL, the country's fourth-biggest housing finance company, has roughly Rs 1 lakh crore ($14.15 billion) of debt, and owes about Rs 40,000 crore to banks alone. The company has defaulted on its obligations several times.

The company held a meeting on Friday to present the Draft Resolution Plan to its lenders and to inform them of the steps required to implement it, the firm said in a release on Saturday.

The company now proposes that 2.3 per cent of each category of lenders' debt exposure to it will be converted into equity at an assumed price of Rs 54 per equity share.

The draft resolution plan will be subject to approval of investors and lenders.

Whether lenders agree to the conversion price needs to be seen as shares in the company closed at Rs 42.25 on Friday.

The mortgage lender has been looking at various ways to emerge from the stress which first came to light in September last year following the collapse of infrastructure lending behemoth Infrastructure Leasing and Financial Services.

The company has looked at selling stakes in group entities, including in the flagship.

Following the debt conversion, lenders' will acquire a 51 per cent stake in DHFL.