A lowdown on NARCL’s resolution plan for SREI Infrastructure Finance
The resolution plan submitted by National Asset Reconstruction Company Ltd (NARCL) for debt-ridden SREI Infrastructure Finance Ltd and SREI Equipment Finance Ltd has been approved by the Kolkata Bench of NCLT. The plan was approved with 89.25% voting share by the Committee of Creditors (CoC).
The resolution applicant has committed to an upfront cash of Rs 3,180 crores and a deferred payment of Rs 11,487 crore. The plan has a provision of offering financial creditors a 20% stake in SREI Infrastructure Finance Ltd. The fair value of the 20% stake has been estimated at Rs 200 crore.
According to the plan, if the cash and cash equivalents of SREI Infrastructure Finance on the effective date (the date the resolution plan is approved) is less than INR 3180 crores, the resolution applicant will have to arrange for additional funds to meet the threshold. If the cash and cash equivalents of the corporate debtor on the effective date is more than INR 3180 crores, the resolution applicant will adjust the excess funds in the manner as provided in the resolution plan. However, the cash portion of the assignment payment will remain unchanged.
Of the Rs 11,487 crore deferred payment, Rs 8,000 crore will be in the form of Optionally Convertible Debentures (OCDs) from SREI Equipment Finance Ltd (SEFL), and Rs 3487 crore will be in the form of security receipts from ARC Trust backed by committed NCDs redeemable from recoveries of underlying assets of SEFL. An amout of Rs 2 crore has been provided for as CIRP cost.
The other bidder Authum Investment and Infrastructure Limited had 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.
SREI Infrastructure Finance and SREI Equipment Finance owed Rs 33,000 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.
Also See: Srei Equipment Finance reports Rs 1,500 cr more fraudulent transactions
