NARCL's net present value bid is ₹3,200 crore cash, which is ₹1000 crore more than the previous proposed schemes.
Government-backed National Asset Reconstruction Company Ltd is headed to take over two stressed entities of the Srei Group as it submitted the "highest net present value bid of Rs 5,555 crore" among bidders, an official said on Wednesday.
Official report news agency PTI said that the net present value bid of NARCL is ₹3,200 crore cash, a jump of ₹1000 crore from the previous offered schemes. The bids were submitted in a 10-hour "challenge mechanism" held on Tuesday by the Committee of Creditors (CoC).
The official said that although NARCL has a "clear advantage" to take control of Srei Infrastructure Finance and Srei Equipment Finance, Authum Investment & Infrastructure, another bidder in the insolvency resolution process for the two stressed assets, is 'not out of the game'. Is' .
"Authum Investment & Infrastructure, another bidder is not out of the game even though it was marginally behind in the final and fifth financial challenge bidding round due to terms and conditions and legal compliances," the official said.
He said that as a result of failing to raise bids above ₹4,800 crore, a consortium of Verde Partners and Arena Investors, another bidder in the resolution process, was "out of the running during the third round".
Srei administrator Rajneesh Sharma told PTI, "The challenge system was successfully operated and completed at midnight."
In the challenge mechanism process, two parameters – an upfront cash component and the net present value (NAV) of the amount committed under the financial proposals – are the key factors.
"Srei has cash of ₹2,200 crore on its balance sheet. The successful bidder will have to infuse ₹1,000 crore in cash to acquire Srei's assets. Apart from the cash, short-term realization of ₹3,450 crore is expected in the next 2 -3 years, while optionally convertible bonds worth ₹8,000 crore will be issued by the successful bidder for a period of up to seven years," said a source quoted by PTI.
He said the total comprehensive resolution plan would be Rs 13,000-14,000 crore.
"In the worst-case scenario, the Srei resolution process is expected to recover ₹9,500-10,000 crore of the approximately ₹32,000 crore at risk for the lenders," the source said.
Technical bids have already been received and after the financial bids, the two bidders - NARCL and Authum - will submit their comprehensive plans and these will be placed before the CoC on January 8-9 for a final vote to declare the winner.
Now the lenders will look into the final resolution plan and the "terms" therein in compliance with the Insolvency and Bankruptcy Code.
The CoC meeting will be held on January 7 and the deadline will be decided before the voting on January 8 or 9.
"The whole process may continue till the end of January and we expect an extension from the Adjudicating Authority today. A lot of time was wasted due to multiple court cases filed by an individual shareholder of Srei," the source said.
NARCL clarified that it would not be able to give government-backed guarantees as the asset acquisition is not on nomination basis.
The Reserve Bank of India superseded the boards of Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd for insolvency proceedings due to governance concerns and repayment defaults.
Insolvency proceedings against SIFL and its subsidiary SEFL began in October 2021, after the insolvency petitions filed by the RBI were approved by the Kolkata bench of the National Company Law Tribunal (NCLT).
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