Kolkata-based Srei Equipment Finance on March 31 said it has received an expression of interest from international investors for capital infusion. A committee has been set up to take the capital-raising process ahead, it said.
The board of Srei met on March 30 and constituted a strategic coordination committee (SCC), comprising independent directors for this purpose. The SCC will coordinate, negotiate and conclude discussions with potential strategic and/or private equity investors, to raise fresh capital for the business in consultation with the management, the company said.
The SCC will be chaired by Independent Director Malay Mukherjee. The other committee members include Suresh Kumar Jain, Tamali Sen Gupta, Uma Shankar Paliwal and Shyamalendu Chatterjee, the company said.
The committee will take forward the expression of interest received from international investors and will also initiate discussions with other potential suitors who have been in touch with the company over the last one year in consultation with the management.
The committee will be assisted by advisors and investment bankers who will be working closely with the members. “The SCC will be the nodal point for a comprehensive cash flow realignment plan with banks and financial institutions and for all external service providers, including investment bankers, lawyers and consultants,” the company said.
The Kolkata-based NBFC, which has assets worth around Rs 43,000 crore, faced significant stress due to COVID-19. It faced difficulties in recovering money from businesses—that were hit hard by a slump in business due to the pandemic—it lent money to and, consequently impacted its repayments to its own lenders.
Around 60 percent of businesses that borrowed money from Srei have approached the company to restructure the loans due to financial stress caused by the pandemic. Srei owes around Rs 18,000 crore to around 15 lenders including Axis Bank, Uco Bank and SBI.
“For NBFCs, money is the raw material. SEFL has been continuously exploring opportunities to strengthen its capital base. The expression of interest from renowned global institutional investors reflects the confidence that international investors have on Srei's business. The company will be working towards resolving matters with the creditors at the earliest,” the company said in the statement.
In December, lenders to Srei capped the salaries of the senior management leading to the resignation of several executives.