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The National Asset Reconstruction Company (NARCL) received majority votes of 89.25 per cent from the Committee of Creditors (CoC) for the insolvent Srei group companies – Srei Infrastructure Finance and Srei Equipment Finance - during the voting process which concluded late on Tuesday night.
According to sources close to the development, Authum Investment and Infrastructure received 84.86 per cent votes while the consortium of Varde Partners and Arena Investors received 9 per cent.
“The approved resolution plan of NARCL will be sent to the Reserve Bank of India to determine the ‘fit and proper’ criteria and if it is found to be alright then a letter of issuance will be issued to them,” sources close to the development said.
NARCL will also be required to submit a performance bank guarantee. The approved resolution plan of NARCL, along with an application, will be submitted to the Kolkata Bench of NCLT by February 18 for its approval, they added.
Three bids
Following the completion of the challenge mechanism process, the Srei group entities had received three bids. NARCL’s offer was ₹5,555 crore in NPV (net present value) terms including upfront cash of ₹3,180 crore; Authum Investment and Infrastructure’s bid was for ₹5,526 crore and the consortium of Varde Partners and Arena Investors’ financial bid was at ₹4,680 crore, including ₹3,250 crore upfront cash.
The voting process for the three resolution plans submitted by PRAs for the Srei group entities began in mid-January and went on till February 14, sources close to the development said.
Promoters’ plan
In a fresh twist in the ongoing corporate insolvency resolution process, the erstwhile promoters had recently submitted a resolution plan to withdraw the companies from insolvency under Section 12A and settle the entire claim of around ₹32,000 crore to the creditors. The offer, which has been submitted to the administrator through SIFL promoter company, Adisri Commercial, included ₹3,500 crore upfront cash with NPV of ₹7,000 crore. The erstwhile promoters had proposed to repay entire claim using multiple financial instruments such as upfront cash, NCDs, OCDs and equity over a period of time.
However, the resolution plan was not accepted by the administrator as he was not “competent authority” to accept the plan under Section12 A of IBC.
It is to be noted that the insolvency proceedings against the two companies 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.
The total admitted claims of the financial creditors of the two NBFCs is estimated at ₹32,750 crore.
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