A consortium of alternative investment firm Varde Partners and institutional asset manager Arena has been allowed time till midnight of Saturday to make a bid compliant with norms for the debt-laden Srei group entities, sources said.The administrator for Srei Infrastructure Finance and Srei Equipment Finance has shot out a letter to Varde-Arena consortium dismissing their allegations over the ‘challenge mechanism’ process adopted for resolution of the companies. The consortium had raised concerns over the debt resolution process, calling it unreasonable, unfair, rushed and ad-hoc.The consortium has now been asked to make a bid compliant with the process, sources said.
Varde Partners-Arena had sent their revised plan after close of the ‘challenge mechanism’ window on Tuesday and claimed to be the highest bidder.Sources said despite improving their terms, their financial bid in terms of net present value (NPV) turned out to be just Rs 4,687 crore, including revised upfront cash amount of Rs 3,600 crore.National Asset Reconstruction Company Ltd (NARCL) remained the top bidder with NPV bid of Rs 5,555 crore.”The administrator in a four-page reply has refuted the allegations in the Corporate Insolvency and Resolution Process levelled by the Varde-Arena consortium. It was communicated that their revised bid was non-compliant.”He has allowed the consortium time till 11.59 PM on January 7 to submit a compliant proposal. If not sent, their bid will not be put to vote in the Committee o Creditors (CoC) meeting,” a source told PTI.
“The letter was explicit in explaining how their allegations were baseless and misguided. It is about compliance. RBI was also appraised about the development,” the source added.The CoC was annoyed over the ‘wild allegations’ levelled by the Varde-Arena consortium who participated till the second round in the challenge mechanism bidding on Tuesday, before they were outbid by other applicants in the subsequent rounds, sources said.
Varde currently manages over USD 13 billion in assets with teams in North America, Europe and Asia Pacific focused on corporate and traded credit, real estate, and financial services. Arena Investors is a global institutional asset manager that provides solutions for those seeking capital in special situations with an AUM of USD 3 billion.