Voting For IBC Resolution Of Twin Srei Companies To Begin On Thursday

Voting for the resolution of twin Srei companies-- Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd -- under the Insolvency and Bankruptcy Code (IBC) will begin on Thursday.

SREI has received three compliant resolution plans, which will be voted on by lenders and debenture holders.

"All legal approvals are in place and the voting process will begin tomorrow. Three resolution plans received under the challenge mechanism will be put under voting. The pending legal cases will not have any bearing on the voting and ongoing IBC process," an official told PTI declining to be identified.

"The voting process will continue for a few days and results are expected to be announced by February 5-6," the source said.

There are some 40 lenders and over a lakh debenture holders. The challenge mechanism is a bidding process used in IBC resolutions.

As per the challenge mechanism process, state-backed National Asset Reconstruction Company Ltd's (NARCL) total plan value stood at Rs 14,667 crore including an NPV (net present value) bid of Rs 5,555 crore.

Authum Investment and Infrastructure's total plan value was at Rs 9,126 crore and Varde Partners and Arena Investors' total value stood at Rs 12,890 crore.

Sources, however, said lenders will offer more weightage to cash and NPV of the committed amount rather than the total plan value.

According to sources, the NARCL is leading in NPV offers held in the challenge mechanism bidding. But, Authum has an advantage in upfront cash commitment which is Rs 3,240 crore against NARCL's down payment of Rs 3,180 crore. Varde consortium offered upfront cash of Rs 3,250 crore but lagged in the NPV bidding process.

"There are some differences of opinion among lenders, so it is expected to be a close contest," a source said.

The RBI filed insolvency petitions against SIFL and its subsidiary SEFL in October 2021, which were approved by the Kolkata bench of the National Company Law Tribunal (NCLT).

The total admitted claims of the financial creditors of the two NBFCs are Rs 32,750.22 crore.

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