Srei: CoC starts evaluations of three resolution plans | The Financial Express

Srei: CoC starts evaluations of three resolution plans

The final list of the prospective resolution applicants for the two companies consisted of 17 entities.

Srei: CoC starts evaluations of three resolution plans
The second bid submitted by Shon Randhawa and her partner was of around Rs 10,000 crore during the first round of CIRP, when the final list of the prospective resolution applicants had consisted of 13 entities.

National Asset Reconstruction Company (NARCL), Authum Investment and Infrastructure, and the consortium of Varde Partners and Arena Investors have submitted resolution plans for acquiring two insolvent Srei companies, which are currently under the corporate insolvency resolution process.

The deadline for submission of the resolution plans by prospective resolution applicants was December 2. Although AM Mining, an affiliate of ArcelorMittal, and Capri Global were the late entrant to the final list of the prospective resolution applicants for the two NBFCs, they have not submitted resolution plans and dropped out of the race for buying out Srei Infrastructure Finance (SIFL) and Srei Equipment Finance (SEFL). The final list of the prospective resolution applicants for the two companies consisted of 17 entities.

The consolidated committee of creditors (CoC) of the two Srei companies met on Saturday and started legal evaluations of the three resolution plans. “After the completion of the legal evaluations of the resolution plans, commercial evaluation of the plans will start. The next CoC meet is scheduled on December 7. The process of approving a plan by the CoC is expected to be completed by December 15,” sources close to the development told FE.

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According to the sources, the consortium of Varde Partners and Arena Investors have submitted an improved resolution plan this time. The consortium is learnt to have submitted a financial bid of around Rs 14,500 crore.

Notably, during first round of the corporate insolvency resolution process (CIRP), the consortium had put forward a bid of around Rs 14,000 crore. The second bid submitted by Shon Randhawa and her partner was of around Rs 10,000 crore during the first round of CIRP, when the final list of the prospective resolution applicants had consisted of 13 entities. A mail sent to the administrator, Rajneesh Sharma, went unanswered till the time of going to press.

The creditors had not agreed upon the upfront cash offered by the two bidders in the first round, and with a view to maximise the value of the assets of the corporate debtors for all stakeholder, a request for fresh resolution plans was issued by the administrator. After that Expressions of Interest (EoIs) were received from AM Mining, Capri Global Holdings, NARCL and Authum Investment and Infrastructure. And, following the approvals from the CoC, the administrator added the names of the entities to the final list of Prospective Resolution Applicants.

Insolvency proceedings against SIFL and its subsidiary SEFL commenced in October 2021 after insolvency petitions filed by the Reserve Bank of India were approved by the Kolkata bench of the National Company Law Tribunal (NCLT). The final date for completion of the CIRP process is scheduled on January 5, 2023.

As per the procedures, the CoC would open a commercial or financial bid of the resolution plans received only if it meets legal compliance. After that the plans will be put on vote simultaneously and the CoC members will vote as per their preferences. The resolution plan which receives the highest votes shall be considered as approved by the CoC.

The total admitted claims of the financial creditors of the two NBFCs are Rs 32,750.22 crore.  State Bank of India, Punjab and Sind Bank, Axis Bank, HDFC Bank, Union Bank of India, IDBI Bank, UCO Bank and Indian Overseas Bank, among others, are the financial creditors of SIFL and SEFL.

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First published on: 04-12-2022 at 05:45 IST