The National Company Law Tribunal (NCLT) has approved the Reserve Bank of India’s application for an additional 60-day extension for completion of the Corporate Insolvency Resolution Process (CIRP) for two insolvent Srei Group companies as two resolution plans are at an advanced stage of consideration.
Rajneesh Sharma, the administrator for the two insolvent NBFCs, has received two resolution plans from two applicants — a consortium of Varde Partners and Arena Investors, and entrepreneur Shon Randhawa and her partner Rajesh Viren Shah.
The application, seeking further 60 days to complete the CIRP, was moved before the Kolkata bench of the NCLT by RBI, through the administrator. The application stated that the two resolution plans have been received by the administrator and these plans are at an advanced stage of consideration and the process shall be completed on or before November 3, 2022.
The counsel for RBI submitted before the bench that if a further time of up to 60 days was granted for the completion of the CIRP, it would enable the consideration of the resolution plans. The time sought in this application was within the outer limit of 330 days as laid down in Section 12(3) of the Insolvency and Bankruptcy Code (IBC). The application was duly supported by an affidavit.
“We have considered the submissions of the Ld. Senior Counsel and have perused the application filed by the applicant. We are of the view that there are circumstances in which substantial time was consumed in various litigations mentioned in paragraph 20 of the instant application,” the NCLT Kolkata bench, comprising justices Balraj Joshi and Rohit Kapoor, said in its order dated August 31.
“We, therefore, consider it appropriate in the larger interest of resolution of the stressed assets of the corporate debtor to enlarge the time by 60 days from the date of expiry of the last enlargement of time. It is directed that the CIRP be completed within this enlarged period,” the order stated.
FE has earlier reported that the consolidated committee of creditors of the two Srei group companies, Srei Infrastructure Finance (SIFL) and Srei Equipment Finance (SEFL), decided to negotiate with the two resolution applicants to increase the financial bid values and upfront cash offered. The consortium of Varde Partners and Arena Investors put forward a bid of around Rs 14,000 crore, while the second bid submitted by Randhawa and her partner was around Rs 10,000 crore.
During the 14th meeting of the consolidated committee of creditors (CoC) of SIFL and SEFL, conducted on September 5, the resolution applicants presented detailed resolution plans during the meeting. It was decided during the meeting that the CoC would hold talks with the resolution applicants regarding increasing the bid values, among other points.
The creditors will also discuss the matter of the earnest money deposit (EMD), as Randhawa and Shah did not furnish it in the prescribed format. Moreover, they had requested some modifications in the prescribed norms for the EMD, which required to be furnished along with the financial bids. To decide on the EMD matter, a committee was constituted, according to sources.
As of January 31, the administrator admitted total claims of Rs 22,964.64 crore of commercial banks of SIFL and SEFL, against the combined amount of Rs 25,115.29 crore claimed by them.
The final list of the prospective resolution applicants for SIFL and SEFL consisted of 13 entities, including Vedanta, Jindal Power, ARCIL, JM Financial Asset Reconstruction Company and Edelweiss Alternative Asset Advisors.
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.