Three days after the erstwhile promoters of Srei group submitted a resolution plan to withdraw the companies from insolvency under Section 12A and settle the entire claim of around ₹32,000 crore to the creditors, the administrator of the two insolvent group companies is believed to have returned the plan.
According to sources in the know of the matter, the administrator may not be the “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 Srei Infrastructure Finance and Srei Equipment Finance, to either accept or reject the resolution plan in this case.
In a fresh twist in the ongoing corporate insolvency resolution process of the Srei group entities, the erstwhile promoters 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 was to be repaid using multiple financial instruments such as upfront cash, NCDs, OCDs and equity over a period of time.
“Under Section 12A, a resolution plan should be submitted to the insolvency applicant. Here, the RBI had filed the insolvency petition for initiation of the insolvency proceedings. So, a plan under Section 12A should be sent to RBI,” sources said.
According to sources close to the Kanorias of the Srei group, while they have not received any formal intimation as yet, it would be ‘unusual’ on part of the administrator or the bankers not to accept such a proposal which was “highest in value and merit”.
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 voting process for the three resolution plans submitted by PRAs for the Srei group entities – Srei Infrastructure Finance and Srei Equipment Finance – began in mid-January and is expected to be completed soon and the voting result is likely to come out by February 15, sources close to the development said.
