Lenders nod to NARCL bid for Srei Infrastructure Finance, Srei Equipment Finance
The National Asset Reconstruction Co. Ltd (NARCL) has emerged the successful bidder for two Srei Group firms – SREI Infrastructure Finance and SREI Equipment Finance – after the committee of creditors voted its resolution plan by a 90% votes.
The other bidder Authum Investment and Infrastructure Limited reportedly received 85% votes of the lenders.
NARCL has emerged the highest bidder with a Net Present Value (NPV) of Rs 5,555 crore. Authum Investment and Infrastructure Limited was 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.
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.
NARCL’s plan will be sent to the Reserve Bank of India for a no-objection certificate and then filed with the National Company Law Tribunal.
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.
The RBI had on 4th 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.
The central bank initiated the insolvency proceedings against the two NBFCs – Srei Infrastructure Finance and Srei Equipment Finance — after a consortium of lenders led by UCO Bank sought RBI’s directions on pursuing recovery of dues from the Srei Group after loans worth about Rs 30,000 crore was identified as non-performing assets (NPA) this quarter.
It has been reported in the media that the Kanoria family – the ex-promoters of SREI Group — had proposed to make full payment to lenders in their last attempt to gain control of the company.
Also Read: NARCL emerges the highest bidder for SREI Infrastructure Finance, SREI Equipment Finance
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