Era Infra gets lifeline as NCLT approves SA Infrastructure’s resolution plan

The National Company Law Tribunal (NCLT) has given a sigh of relief to Era Infra Engineering Limited (Era Infra) by approving the resolution plan submitted by SA Infrastructure Consultants Private Limited (SA Infrastructure). This move paves the way for Era Infra’s revival under new management.

Creditors Overwhelmingly Back Resolution Plan

The plan received strong backing from Era Infra’s creditors, with a whopping 87.08% voting in favor during the Committee of Creditors’ 32nd meeting. This demonstrates a clear consensus on SA Infrastructure’s proposal.

Key Highlights of the Resolution Plan

• Upfront Payment: SA Infrastructure will provide an upfront payment of Rs. 46.88 crore to cover the insolvency resolution process (CIRP) costs. This prioritizes settling these expenses before addressing other debts.
• Debt Restructuring for Secured Creditors: The plan offers a four-pronged approach for secured creditors:
  • Immediate payment of Rs. 30 crore.
  • Issuance of secured bonds (NCDs) worth Rs. 378 crore, restructuring existing debt.
  • Sharing proceeds from any successful arbitral awards Era Infra might win.
  • Conversion of remaining debt into a 4% equity stake in the revived company.

Fair Value Assessment

An independent assessment determined Era Infra’s average fair value and liquidation value to be Rs. 405.35 crore and Rs. 199.26 crore, respectively. The resolution plan offers a significant recovery prospect compared to liquidation.

SA Infrastructure’s Commitment and Expertise

SA Infrastructure has pledged to:

• Fulfill the upfront payment of Rs. 30 crore and redeem the issued NCDs, irrespective of the outcome of arbitral awards.
• Leverage Era Infra’s existing pre-qualifications to secure new projects and ensure timely completion of ongoing ones.
• Utilize its 17+ years of experience in the EPC (engineering, procurement, and construction) sector to win new projects and manage Era Infra’s operations effectively.

Era Infra’s Road to Revival

The NCLT order follows the initiation of CIRP against Era Infra in May 2018. With the plan’s approval, Era Infra gets a chance to return to solvency and potentially reclaim its position in the infrastructure sector.

Also Read: The curious case of Era Infra