The Kolkata Bench of the National Company Law Tribunal (NCLT) on October 8 gave its approval to start insolvency proceedings against the two companies.
Creditors to Srei Infrastructure Finance and its wholly owned subsidiary Srei Equipment Finance have been asked to submit their claims to the administrator by October 22 as the corporate insolvency resolution process (CIRP) has been initiated against the two companies.
The Kolkata Bench of the National Company Law Tribunal (NCLT) on October 8 gave its approval to start insolvency proceedings against the two companies after the Reserve Bank of India had filed insolvency applications. Rajneesh Sharma has been appointed administrator of the companies.
“Creditors of the companies may submit their claims with proof on or before October 22, 2021 to the administrator at the address specified in the announcements. Financial creditors may submit their claims with proof by electronic means only. Other creditors may submit their claims with proof in person, by post or via electronic means,” according to a public announcement for invitation of claims in the CIRP against Srei Infrastructure Finance and Srei Equipment Finance.
On a request made by public sector lender UCO Bank, the RBI filed the applications for initiation of the CIRP under the Insolvency and Bankruptcy Code against the two companies through Sanjay Ginodia, senior partner of R. Ginodia & Co.
Citing governance concerns and defaults by the two NBFCs in meeting their various payment obligations, the RBI on October 4 superseded their boards and appointed Sharma, former chief general manager, Bank of Baroda, as the administrator of the companies. The central bank has also constituted a three-member advisory committee to assist the administrator.
According to rating reports by CARE Ratings, dated March 6, Srei Infrastructure Finance owed banks loans worth Rs 11,117.71 crore, apart from outstanding bonds and non-convertible debentures (NCDs) worth Rs 710.63 crore. Srei Equipment Finance had outstanding bank loans worth Rs 16,912.21 crore and other debt instruments worth Rs 499.45 crore. All these facilities and instruments were rated ‘D’, or default grade, in March.
On Monday, Srei Infrastructure Finance’s scrip closed 4.98% lower at Rs 6.68 on the BSE.