The Kolkata bench of the National Company Law Tribunal (NCLT) is scheduled to hear the Srei companies’ administrator’s applications on approval of NARCL’s resolution plan on March 24, after hearing the applications filed by Authum Investment challenging the mechanism under which the bad bank emerged as the top bidder.
Authum Investment and Infrastructure, whose financial bid was adjudged the second-highest in net present value (NPV) terms after the challenge mechanism process concluded, filed a petition before the tribunal challenging the process, adopted by the consolidated committee of creditors (CoC) for the two insolvent Srei companies, in which state-backed National Asset Reconstruction Company (NARCL) became the highest bidder.
Submitting before the NCLT Kolkata bench comprising Justices Rohit Kapoor and Balraj Joshi on Tuesday, counsels appearing for Authum appealed to set aside the scoring and evaluation matrix for resolution plans used by the CoC. The counsels urged the bench to direct the administrator to place before the CoC a “revised evaluation matrix”.
The bench directed the counsels of Authum to serve copies of the notice to both the CoC and NARCL. This matter will come up for further hearing on March 21.
Notably, the approved resolution plan of NARCL was submitted by the administrator, Rajneesh Sharma, to the NCLT on February 18 for its approval.
Three bidders — NARCL, a consortium of Varde Partners and Arena Investors, and Authum Investment — participated in the challenge mechanism process on January 3, adopted by the CoC, to acquire the two NBFCs under the CIRP. After the challenge mechanism process ended, NARCL’s offer of `5,555 crore in net present value (NPV) terms was found to be the highest. Authum Investment’s bid of `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 `4,680 crore in terms of NPV.
The consolidated CoC approved the resolution plan of NARCL with the highest voting among the bidders. The resolution plan of the government-owned ARC was approved with a 89.25% voting share of the consolidated CoC for Srei Infrastructure Finance (SIFL) and Srei Equipment Finance (SEFL). While the resolution plan submitted by Authum received 84.86% vote, that of the consortium of Varde Partners and Arena Investors got 9% vote.
The insolvency proceedings against SIFL and SEFL commenced in October 2021 after insolvency petitions filed by the Reserve Bank of India
The total admitted claims of the financial creditors of the two NBFCs are at `32,750.22 crore. State Bank of India, Punjab National Bank, Axis Bank