The resolution plan submitted by the National Asset Reconstruction Company (NARCL) for the insolvent Srei Group companies — Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL) — will only be considered by the National Company Law Tribunal (NCLT) Kolkata bench following the presentation of arguments by Authum Investment and Infrastructure challenging the mechanism.
NARCL’s final resolution plan, which was scheduled to be heard by NCLT on Tuesday, will now be heard on March 24.
Following the challenge mechanism process, Authum’s financial bid was adjudged as the second highest in net present value (NPV). A petition was filed recently by Authum before the NCLT Kolkata bench challenging the process by which NARCL emerged as the top bidder to acquire the two companies due to issues with the evaluation matrix adopted by the Committee of Creditors (CoC).
Following the completion of the challenge mechanism process, the Srei group entities received three bids. NARCL’s offer was ₹5,555 crore in NPV terms including upfront cash of ₹3,180 crore; Authum’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.
NARCL received the majority votes at around 89.25 per cent by the CoC post the challenge mechanism, while Authum received close to 84.86 per cent votes. The consortium of Varde Partners and Arena Investors received 9 per cent votes.
NCLT Kolkata bench’s view
According to the NCLT Kolkata bench comprising of Rohit Kapoor, Member (J), and Balraj Joshi, Member (J), Authum in its application kept only the administrator as the respondent while there was a need to serve notice to both CoC and the successful resolution applicant, which is NARCL in this case.
“We deem it proper to make the SRA (successful resolution applicant) NARCL and CoC as party respondent in this application (filed by Authum Investment and Infrastructure),” said Rohit Kapoor after listening to the arguments by the counsel appearing on behalf of Authum on Tuesday.
The bench further directed the counsel to serve the copy of the notice to both the CoC and NARCL and set March 21 as the date for hearing the arguments. “Only after hearing their argument can they go for approval of the plan,” said sources.
Question raised
On Monday, the erstwhile promoters of Srei — Adisri Commercial raised the question on the very order that admitted the Srei group companies for insolvency proceedings and urged NCLT Kolkata bench to set aside the order as the date of alleged default fell within the “blackout period” mentioned under Section 10A of Insolvency and Bankruptcy Code.
The counsels appearing on behalf of the erstwhile promoters also urged the NCLT to consider presenting the resolution plan, submitted by them under Section 12 A, to the CoC for their consideration. Both matters will come up for further hearing on March 3.
Source: Business Line, dated 28.02.2023
