The consolidated committee of creditors (CoC) for two insolvent Srei companies is likely to hold a meeting early next week to discuss the way forward as Authum Investment and Infrastructure, one of the bidders, has challenged the mechanism under which state-backed National Asset Reconstruction Company (NARCL) emerged as the top bidder to acquire the debt-laden companies under the corporate insolvency resolution process (CIRP).
Authum Investment, whose financial bid was adjudged the second-highest in net present value (NPV) terms after the challenge mechanism process, has filed a petition before the Kolkata bench of the National Company Law Tribunal (NCLT), challenging the process adopted by the CoC.
The CoC last week approved the resolution plan of NARCL with the highest voting among the bidders. The resolution plan of the government-owned ARC was approved with an 89.25% voting share of the CoC for Srei Infrastructure Finance and Srei Equipment Finance. While the resolution plan submitted by Authum Investment received 84.86% vote, that of the consortium of Varde Partners and Arena Investors got 9% vote.
“The approved resolution plan of NARCL was submitted by the administrator to the NCLT on February 18. Meanwhile, Authum has alleged that the evaluation matrix used for selecting NARCL’s plan was not right. The company said if its plan gets creditors’ approval, it would offer an additional Rs 250 crore,” sources with knowledge of the matter told FE.
“The CoC is likely to meet on Monday (February 27) to form a view on the Authum’s matter,” sources said.
The Kolkata bench of the NCLT is likely to hear the petition filed by Authum Investment next week. Authum officials were not immediately available for comment. Rajneesh Sharma, the administrator, was also not available for comment.
Three bidders ― NARCL, a consortium of Varde Partners and Arena Investors, and Authum Investment – participated in the challenge mechanism process on January 3.
After the challenge mechanism process ended, NARCL’s offer of Rs 5,555 crore in NPV terms, which includes an upfront cash of Rs 3,180 crore, was found to be the highest. The bad bank’s gross offer under the approved resolution plan stands at over Rs 14,000 crore, including cash and committed amount of more than Rs 6,500 crore. The gross offer includes optionally convertible debentures (OCD) of around Rs 8,000 crore, and it would be redeemed on recovery. Putting together all the components, financial creditors would be able to recover around 45% of the amount admitted as claims.
Authum Investment and Infrastructure’s bid of Rs 5,526 crore, in NPV terms, was adjudged the second-highest. The resolution plan submitted by the consortium of Varde Partners and Arena Investors consisted of a financial bid of around Rs 4,680 crore in terms of NPV.