NARCL emerges the highest bidder for SREI Infrastructure Finance, SREI Equipment Finance

National Asset Reconstruction Company Ltd (NARCL) has emerged as the highest bidder for SREI Infrastructure Finance and SREI Equipment Finance in the auctions that began on Tuesday.

NARCL has emerged the highest bidder with a Net Present Value (NPV) of Rs 5,555 crore. The other bidder left in the race – Authum Investment and Infrastructure Limited – is close second with an NPV of Rs 5,526 crore.

As per NARCL’s bid, it will make an upfront payment of Rs 3,000 crore and issue optionally convertible bonds worth Rs 6,000 crore.

According to reports, the resolution plans submitted by the applicants involves upfront cash payment and deferred payments by way issuance of convertible bonds.  A timeline to clear the dues ranges between 3-7 years. Varde Partners was the third bidder in the auction.

Now, the committee of creditors will look into the final resolution plan, when it meets on 7 January 2023.

The RBI had on 4^th October 2021 appointed the Administrator of Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd superseding the Board of Directors.

The RBI filed applications on October 08, 2021 for initiation of corporate insolvency resolution process against SREI Infrastructure Finance Limited and SREI Equipment Finance Limited under Section 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), 2016 read with Rules 5 and 6 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019 (FSP Insolvency Rules) at the Kolkata Bench of the National Company Law Tribunal (NCLT). The said petitions are admitted by NCLT, Kolkata and it has issued orders dated 8th October, 2021

SREI Infrastructure Finance and SREI Equipment Finance owe Rs 32,000 crore to State Bank of India, Punjab and Sind Bank, Axis Bank, HDFC Bank, Union Bank of India, IDBI Bank, UCO Bank, and Indian Overseas Bank.

Meanwhile, the Committee of Creditors (CoC) of Srei lenders will take cognizance of valuation report of twin Srei Group companies undergoing resolution process on Friday, a source said on Thursday. A presentation will be made before CoC on valuation. If the fair and liquidation value of Srei Infra Finance and Srei Equipment Finance is found to be greater than resolution plans submitted by three bidders, CoC may not consider them.

Also Read: Srei Equipment Finance reports Rs 1,500 cr more fraudulent transactions