Two bids have been received for two debt-ridden Srei group companies under the insolvency resolution process and one of the bids is estimated to be worth around Rs 15,000 crore, according to sources.
Srei Infrastructure Finance Limited and Srei Equipment Finance Limited are undergoing a resolution process under the Insolvency and Bankruptcy Code.
"This is to inform you that the 13th (Thirteenth) meeting of the Consolidated Committee of Creditors of Srei Infrastructure Finance Limited and Srei Equipment Finance Limited was duly convened and conducted on Monday, August 29, 2022, from 5:15 P.M. onwards. The meeting was conducted virtually. "It is further informed that the Administrator of the Corporate debtor has received two (2) 'Resolution Plans' pursuant to the Request for Resolution Plan dated April 1, 2022, (as modified on June 30, 2022) issued by the Administrator within the deadline for submission as given to the Prospective Resolution Applicants (PRAs)," a regulatory filing said on Tuesday.
The cash component will play a vital role for the Committee of Creditors (CoC) to decide upon selecting the resolution plan beside other factors, the sources involved in the process said. The Srei group under the RBI-appointed administrator Rajneesh Sharma since last October has been able to recover about Rs 2,100 crore and the money is lying on the balance sheets.
Varde Partners and Arena Investors LP have jointly submitted a bid, while another bid is from the investors' consortium -- Shon Randhawa and Rajesh Viren Shah. Varde-Arena's joint bid for the twin Srei Infrastructure Finance Limited and Srei Equipment Finance Limited is more serious as they have paid around Rs 150 crore as the earnest deposit money, while the Shon Randhawa consortium has put conditions on the EMD.
They suggested the inclusion of two clauses in the terms of the resolution plan, according to the sources. As per broad resolution plans submitted, both bids are competing for the neck to neck, the sources directly involved in the resolution process told PTI.
They said that the resolution plan by the Shon Randhawa consortium has to be improved considerably by at least Rs 400-500 crore (including all components) to encourage the CoC to incorporate the amendments. The CoC is expected to meet on September 2 to discuss and based on their commercial wisdom, they will decide whether to retain the Shon Randhawa consortium in the fray or reject their resolution plan on technical grounds.
While, detailed review by all stakeholders, resolution applicant (the bidder), Srei administrator and the CoC is expected on September 5, where valuations may get raised after the discussions, the sources said. After that, the resolution applicant will be selected to pass on the management of the Srei twins to new owners from the Kolkata-based Kanorias.
The RBI-appointed administrator has admitted claims worth Rs 32,749 crore from financial creditors of the company. So far, transaction auditor BDO India has classified multiple transactions totalling about Rs 5,000 crore as fraudulent, as per the sources.
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