The Kolkata bench of the National Company Law Tribunal (NCLT), on Friday posted all the cases filed by the erstwhile promoter company of Srei group – Adisri Commercial – for further hearing on March 16.

It is to be noted that the erstwhile promoters of the Srei group had urged the Kolkata bench of NCLT to set aside the order admitting the companies under insolvency as the date of alleged default fell within the “black out period” mentioned under Section 10A of IBC (Insolvency and Bankruptcy Code). The counsels appearing on behalf of the erstwhile promoters had also urged the NCLT to consider presenting the resolution plan, submitted by them under Section 12 A, to the Committee of Creditors (CoC) for their consideration.

Both the cases were to be heard on Friday but no fresh submissions were made and the bench posted the cases for further hearing on March 16.

The counsels for the erstwhile promoters had recently raised questions on the very order that admitted the Srei group of companies for insolvency proceedings and requested the bench to set aside the order.

The government had, by way of an ordinance in June 2020, suspended initiation of insolvency proceedings by incorporating Section 10A in the IBC, to mitigate the impact of the Covid-induced lockdown and the resultant slowdown on businesses, thereby leading to defaults. The default for which Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL) were admitted into insolvency fell within this period and hence “there is an error on the face of record”, the counsels had argued.

Adisri Commercial had recently submitted a resolution plan under Section 12A to withdraw the companies – SIFL and SEFL - from insolvency and settle the entire claim of around ₹32,000 crore to the creditors. It had offered to pay ₹3,500 crore upfront cash with NPV (net present value) of ₹7,000 crore. The entire claim of approximately ₹32,000 crore will be repaid using multiple financial instruments such as upfront cash, NCDs, OCDs and equity over a period of time.

However, the administrator of the Srei group companies, had refused to accept the resolution plan saying that he was not a “competent authority” to accept the plan under Section 12A of IBC and it would be up to the Reserve Bank of India, which had filed the insolvency petitions against the companies, to either accept or reject the resolution plan in this case.

Following the completion of the challenge mechanism process, the Srei group entities had received three bids. The state-backed NARCL’s offer was ₹5,555 crore in NPV terms, including upfront cash of ₹3,180 crore; Authum Investment and Infrastructure’s bid in NPV terms was for ₹5,526 crore and the consortium of Varde Partners and Arena Investors financial bid in terms of NPV stood at around ₹4,680 crore, including ₹3,250 crore upfront cash amount.

The consolidated CoC for two insolvent Srei companies approved the resolution plan of NARCL with the highest voting (89.25 per cent) amongst the bidders. The resolution plan submitted by Authum Investment and Infrastructure received 84.86 per cent vote and that of the consortium of Varde Partners and Arena Investors got 9 per cent vote.

Subsequently, Authum Investment and Infrastructure, whose financial bid was adjudged the second-highest in terms of NPV, filed a petition before the Kolkata bench of NCLT, challenging the process adopted by the CoC in which NARCL became the highest bidder. This matter (Authum’s plea) will come up for hearing on March 21.

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