The administrator for Srei group entities is believed to have shot out a letter to the consortium of Varde Partners and Arena dismissing the allegations raised by them over the challenge mechanism process adopted for resolution of the companies on the grounds that the revised plan submitted after the challenge mechanism is “non-compliant”.

According to sources privy to the development, the bid submitted by Varde Arena consortium might not be considered by the committee of creditors as it has breached the terms and conditions of the challenge mechanism.

The consortium had raised concerns over the debt resolution process of Srei Infrastructure Finance and Srei Equipment Finance. In a communication to the administrator of Srei, Varde has said the process was unreasonable, unfair, rushed and ad-hoc.

“The challenge mechanism was approved by the CoC in April itself when the RFRP (Request for Resolution Plan) was finalised. It was decided that the CoC could resort to closed door bidding or challenge mechanism for an upside in resolution plan. The administrator is replying to their allegations with full evidence,” the source said.

Attempts made to reach out to the administrator did not elicit response.

The Varde-Arena consortium has alleged that the challenge mechanism for inviting fresh plans from eligible resolution applicants was carried out at “short notice” and is also understood to have submitted a revised bid with an additional cash component aggregating ₹3,600 crore. “The main mandate of the administrator is to maximise return and the revised bid is a significant improvement over the earlier bid and highest upfront cash,” another source watching the developments said.

Meanwhile, the CoC will take into account the outcome of the techno-economic viability study of the bids, which is expected to come out by January 10. Following this, the plans would be put for voting to CoC following laid down procedures, sources said.

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