The consortium of Varde Partners and Arena Investors has submitted a resolution plan for two Srei companies according to the challenge mechanism process. The administrator, Rajneesh Sharma, had allowed the consortium time till midnight of Saturday to submit a financial bid compliant with the rules of request for resolution plan (RFRP) under the corporate insolvency resolution process.
Notably, dismissing the allegations raised by the consortium about the challenge mechanism process for inviting fresh plans from eligible prospective resolution applicants, the administrator had earlier shot off a letter, asserting that its revised plan submitted after the completion of the process was “non-compliant” because it did not follow the rules of the RFRP.
“Varde-Arena submitted a resolution plan on Saturday as per the challenge mechanism. This plan will be scrutinised by the committee of creditors from legal angles,” sources close to the development told FE.
According to sources, the consortium submitted the plan with the financial bid it had submitted at the end of the second round of the five-round challenge mechanism process on last Tuesday.
Significantly, the consortium, which has been in the fray from the beginning of the corporate insolvency resolution process (CIRP), had dropped out at the end of the second round of the challenge mechanism process. The consortium’s financial bid in terms of net present value (NPV) stood at around Rs 4,680 crore, including Rs 3,250 crore of upfront cash.
After the challenge mechanism process ended, state-backed NARCL’s offer of Rs 5,555 crore in NPV terms, which includes upfront cash of Rs 3,180 crore, was found to be the highest. Authum Investment and Infrastructure’s bid of Rs 5,526 crore in NPV terms was adjudged the second-highest.
Alleging that the challenge mechanism process for inviting fresh plans from eligible resolution applicants was carried out at a “short notice”, the consortium on last Thursday submitted a revised bid, increasing the cash component to Rs 3,600 crore.
“Varde-Arena’s plan, submitted on Saturday, will be opened on Monday. A lenders’ meet is also scheduled,” sources cited above said.
Notably, the CoC decided to adopt the challenge mechanism as in the revised plans submitted by the three bidders earlier, the upfront cash component had remained below Rs 3,000 crore. The creditors, thus, decided that Rs 3,000 crore would be considered as the minimum threshold value of the financial proposals towards the upfront cash payment for the eligible resolution applicants for participating in the challenge process. Mail sent to Srei administrator Rajneesh Sharma went unanswered till the time of going to the press.
The total admitted claims of the financial creditors of the two NBFCs stood at Rs 32,750.22 crore. State Bank of India, Punjab National Bank, Axis Bank, HDFC Bank, Union Bank of India, Canara Bank, IDBI Bank, UCO Bank and Indian Overseas Bank, among others, are the financial creditors.
