SREI: NCLT Approves NARCL's Rs14,867.50 Crore Resolution Plan for SREI Equipment Finance, SREI Infrastructure Finance
Moneylife Digital Team 25 August 2023
The Kolkata bench of the national company law tribunal (NCLT) has approved the Rs14,867.50 crore resolution plan submitted by state-backed National Asset Reconstruction Company (NARCL) for SREI Equipment Finance Ltd (SEFL) and SREI Infrastructure Finance Ltd (SIFL), which are under the corporate insolvency resolution process (CIRP). This is the first acquisition by the government-owned NARCL. The resolution plan of NARCL was approved in February by the committee of creditors (CoC) of these two companies from the SREI group. 
 
As part of the approved resolution plan, optionally convertible debentures (OCDs) with a face value of Rs8,000 crore would be issued to approving financial creditors (AFC). The terms of these OCDs, amongst other things, provide for conversion of the OCDs at the option of the holders from the beginning of the sixth year till maturity or eight years from the date of issuance of OCDs.
 
Further, as part of the approved resolution plan, compulsory convertible preference shares (CCPS) with a face value of up to Rs17,000 crore would be issued to AFCs. The terms of the CCPS, amongst other things, provide for conversion of the CCPS at the end of the tenure or eight years from the date of subscription of CCPS.
 
Besides NARCL, a consortium consisting of Varde Partners and Arena Investors and Authum Investment & Infrastructure participated in the bidding process for SEFL and SIFL. NARCL offered  Rs5,555 crore in net present value (NPV) terms, including upfront cash of Rs3,180 crore. 
 
Including cash and a committed amount of more than Rs6,500 crore, NARCL's gross offer was for Rs14,867.50 crore, which was approved by nearly 90% voting shares of the consolidated CoC of SIFL and SEFL. The Rs5,526 crore resolution plan in NPV terms submitted by Authum Investment & Infrastructure received almost 85% votes. Varde Partners and Arena Investors consortium's plan of Rs4,680 crore in NPV terms, including Rs3,250 crore upfront cash, got just 9% votes.
 
Earlier, the request for proposal (RFP) was changed to resolve a dispute between lenders and the consortium of Varde Partners and Arena Investors about submitting unconditional earnest money deposits (EMDs). The consortium had provided conditional EMDs, which the lenders did not accept. 
 
In October 2021, the Reserve Bank of India (RBI) took over the management of SIFL, the Kolkata-based non-banking housing finance company (NBFC) due to its deteriorating financial conditions and governance issues. Following this, the company came under CIRP. (Read: NCLT Extends Insolvency Resolution Process for Srei Infra till 5th January)
 
The bidding process for Srei Infrastructure Finance and Srei Equipment Finance has seen consistent delays, partly due to bidders seeking more time to submit formal bids. 
 
SEFL, along with its promoter SIFL, is being run by an administrator, which is looking into the day-to-today affairs of the companies since October 2021.
 
After DHFL, SREI was the second financial services group that was referred by Reserve Bank of India (RBI) for an NCLT-driven resolution process, by superseding the boards of these two SREI companies in October 2021.
 
In November last year, SEFL reported alleged fraudulent transactions amounting to Rs13,110 crore, during the erstwhile management of the company, run by Hemant Kanoria and Sunil Kanoria.
 
In the unaudited financial results of the company for the quarter ending 30th September, BDO India LLP, the transaction auditor has pegged the alleged value of the fraudulent transactions at Rs13,110 crore.
 
Before this, the company had reported fraudulent transactions of around Rs5,100 crore, through two separate disclosures in the stock exchange. (Read: SREI Equipment Finance Auditor Reports Rs13,110 Crore Fraudulent Transactions)
Comments
tiwari.kapildev
4 months ago
I urge all of you investors to file a complaint against NCLT and SEBI in the PMO office like me. With the special request of all of us, perhaps the government can take some special steps in this process keeping in mind the poor like us. I have appealed to return my entire investment with interest. Therefore, it is a humble request to you that there is only one way to save your hard-earned savings
tiwari.kapildev
4 months ago
???? ?? ??? ????? ?? ??????? ?? ?? ?? ??? ???? ??? ????? ???? ??? ???????? ?? ???? ?? ?? ????? ?????? ???? ????? ?? ???? ????? ????? ?? ???? ??? ????? ?? ???? ?????? ?? ????? ??? ???? ??? ?? ????????? ??? ??? ????? ??? ??? ???? ????? ?? ???? ???? ???????????? ????? ???? ???? ???? ?? ???? ?? ??? ????? ???? ?????? ?????? ?? ?? ???? ????? ?? ???? ?? ??? ????? ?? ????? ?? ???? ?? ?? ?????? ???
sehgalsanjeev7
4 months ago
I have received some money today, 30 dec, from Srei ncd, but too small, pl tell me what percentage is this
tiwari.kapildev
5 months ago
I have invested all my life's hard earned money in Srei NCD. You all Srei's NCD investors are requested to file a case against SEBI and RBI with this panel of Money Life to get back their principal amount. Everyone should try to reach their voice to the PMO office by writing an article in Moneylife.
cflall2010
5 months ago
DECEMBER 2023 OR dec 2024 ?
tiwari.kapildev
5 months ago
According to the resolution plan, only 46.66% of the secured bonds will be available to the investors in five tranches till the end of December.
gcmishra2008
5 months ago
It is high time that NARCL Should come forwar to address the NCD Holeders that to what extent they will be paid & what will be the time period for the total repaymt.
akshay.padhiya1
5 months ago
Secured or unsecured tell
akshay.padhiya1
5 months ago
Tiwari sir tamaru ketka rupiyanu ncd hata??
tiwari.kapildev
5 months ago
Therefore, it is my humble request to all of you that we all come together and take action against them.Because I had made all this investment for the future of my children.Since then I have also suffered brain hemorrhage and am undergoing treatment.
tiwari.kapildev
5 months ago
Retail investors who had purchased NCDs in Shree Equipment Finance. Those retail investors should file a case against SEBI and Srei in the High Court. So that they can get their principal amount back. How can anyone usurp the hard work and hard work of a poor investor? At this time all the investors should stand together and take action against them.It's all SEBI's fault in this.
yogesh7011855023
Replied to tiwari.kapildev comment 4 months ago
I am with you
tiwari.kapildev
5 months ago
How can someone usurp the hard-earned money of the poor like this?
aamalkkundu
6 months ago
Three weeks back we received a very small amount in my bank. What was the resolution. Did we lost 90%,of our deposit. This is a severe blow to retired and aged person like us
gcmishra2008
6 months ago
I think du to the currput official of SEBI the NBFCS are relentlessly looting the hard earned money of the General Public. why the promoters of SREI has not been put behind the bar by applying the appropriate CPC.
cflall2010
6 months ago
What is the time table / schedule for refund of SREI NCD ?
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