Companies

Srei Infra appoints KPMG as forensic auditor for its debt restructing plan

Our Bureau Kolkata | Updated on April 24, 2021

The company also appointed DmKH and Co for the audit

Srei Infrastructure Finance Ltd on Saturday said that it has appointed KPMG Assurance and Consulting Services LLP and DmKH & Co. as forensic auditors for its proposed debt restructuring plan.

“This is to inform that the Board at its meeting held on 23rd April, 2021 noted the appointment of KPMG Assurance and Consulting Services LLP and DmKH & Co. as the forensic auditors as advised by the bankers as step towards the proposed debt realignment plan and by the independent directors of the company as good governance respectively,” the company said in a regulatory filing to stock exchanges on Saturday.

Kolkata-headquartered Srei group has a total debt outstanding of nearly ₹27,000 crore which includes ₹18,000 crore outstanding to as many as 15 lenders including SBI, Axis Bank and UCO Bank among others. The company has been facing cash flows issues in the wake of the Covid-19 pandemic-driven economic stress.

During the quarter ended December 31, 2020, Srei Infrastructure Finance posted a consolidated net loss of ₹3,810 crore on account of higher and accelerated provisioning as a prudent measure.

The company had anticipated the impact of Covid-19 on its customers and the cascading effect of the pandemic would have on its loan recovery efforts. SEFL had proactively approached the National Company Law Tribunal (NCLT) with a scheme that proposed repayment of the loans that it had borrowed in an orderly manner over a period of time.

“SEFL plans to repay its loans through the recoveries and hence the scheme was submitted to all the creditors to realign the repayment schedule with expected collections from customers. The lenders also have the flexibility to make necessary amendments in the proposed schemes,” the company said in a statement.

Capital Infusion

Srei Equipment Finance Ltd (SEFL), a wholly-owned subsidiary of Srei Infrastructure Finance, has further received an expression of interest (EoI) for capital infusion from Cerberus Global Investments B.V.

The company had, earlier this month, received expression of interest for up to $250 million (approx ₹1,865 crore) capital infusion from international private equity funds including US-based Arena Investors LP and Singapore's Makara Capital Partners.

Established in 1992, Cerberus comprises one of the world's leading private investment firms with approximately $53 billion under management across multiple strategies.

“SEFL has proceeded with discussions with both Arena Investors and Makara Capital and the company's Strategic Coordination Committee (SCC), chaired by independent director Malay Mukherjee, is currently engaged in discussions with the private equity funds to bring capital into the business,” the company said in a press statement.

The SCC has been running an independent process for investments in SEFL and many large players have evinced interest. The proposed capital infusion, which is being carried out in parallel to the company's debt realignment plan, is expected to provide cushion against the pandemic induced stress in the Indian financial services space.

Ernst & Young is advising the SCC on the fund raising exercise.

Published on April 24, 2021

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