Money & Banking

RBI, CARE challenge Kolkata NCLT order on moratorium to Srei

Mumbai | Updated on March 27, 2021

The Reserve Bank of India (RBI) and CARE Ratings have challenged the Kolkata National Company Law Tribunal’s order which allowed Srei Equipment Finance Ltd’s Scheme of Arrangement with creditors in the National Company Law Appellate Tribunal.

The Scheme of Arrangement proposed moratorium in terms of coupon payments during January 1, 2021, to June 30, 2021, along with postponement of redemption dates based on the type of creditor.

SEFL is a wholly owned subsidiary of Srei Infrastructure Finance Limited (SIFL).

The NCLT order said: “…We direct that in the meantime till further orders, the creditors (including representative security and debenture trustees) of the applicant company covered under the scheme shall maintain status quo with respect to their respective contractual terms dues claims and rights and the creditors (including security and debenture trustees), and all governmental or regulatory authorities shall be estopped from taking any coercive steps, including reporting in any form and/or changing the account status of the company from being a standard a standard asset, which will prejudicially affect the company and/or sanctioning and/or implementation of the scheme.”

The tribunal further directed that the credit rating agencies shall not consider any such non-payment to be a default under the respective debt documents and shall maintain the rating(s) of SEFL at least that of investment grade.”

Referring to the NCLT order, CARE Ratings, in a statement, said that in view of the NCLT order, it was restrained from treating the non-payment of interest/principal as a default.

“However, CARE was seeking legal assistance on possible course of action available to it in view of the NCLT order and had filed an appeal in National Company Appellate Law Tribunal (NCLAT, New Delhi) for a stay on the NCLT order dated December 30, 2020,” the agency said.

Published on March 26, 2021

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