Srei promoters, the Kanoria family, have proposed to make full payment to lenders in a last-ditch attempt to regain control over the bankrupt financial services companies in the last stage of debt resolution under corporate insolvency.
Adisri Commercial gave its plan to the administrator of twin Srei companies, Rajneesh Sharma, on February 6, said people who are aware of the development.
The offer from Kanoria comes when lenders have begun voting on the three resolution plans.
The administrator last week extended the deadline to February 15 to vote on plans given by National Asset Reconstruction Company Ltd,
and Varde Partner – Arena Investors team.
Adisri offered Rs 3000 crore upfront payment and the balance as deferred payment in the form of non-convertible debentures (NCD), optional convertible debentures (OCD) and equity.
Secured lenders of Srei Equipment Finance Ltd (SEFL) and
lenders will receive Rs 3500 crore as NCDs within 90-days of the effective date, another Rs 3500 crore NCDs as staggered payment and Rs 10,000 crore as OCD, said one of the persons cited above.
Lenders will also receive 20.4% equity of SEFL against their loan of Rs 12092 crore, according to the offer.Earlier, Adisri Commercial had challenged at the National Company of Law Appellate Tribunal the tribunal’s decision to admit the twin Srei companies for corporate insolvency. The appellate tribunal on December 21 rejected this application. NCLAT also questioned the reasons for its refiling an application 321 days after the tribunal rejected its first petition.
The offer by the promoter is made under Section 12A of the Insolvency and Bankruptcy Code (IBC), whereby the tribunal can permit withdrawal of a resolution plan if 90% of lenders by value vote in favour of the promoter’s plan.
For debt resolution of a finance company under IBC, once the lenders approve the plan, the Reserve Bank of India has to approve the resolution applicant as ‘fit and proper.’ Only after this the tribunal can endorse a plan.
“Before considering the plan, lenders will have to factor two issues – the source of funds and the likelihood of RBI endorsing the applicant,” said a bank official.
Most lenders have taken approval from their respective boards for the plans given by three applicants. “Given that the deadline for the resolution ends on February 18, there is very little time in hand to consider this last-minute offer,” the same banker said. Some fear that the resolution process of Srei may get delayed due to the promoter’s offer.
Until now, NARCL, the government-promoted bad bank, has given the highest offer of Rs 5,555 crore on a net present value (NPV) basis for the assets.
Authum Investments had offered Rs 5,526 crore, while the Arena-Varde team offered Rs 4,682 crore at an auction on January 3. However, a day later, the Arena-Varde team improved its offer to Rs 4,832 crore. All offers are on an NPV basis, which is arrived at by discounting future cash flows.
The administrator has admitted Rs 32,750 crore in claims from verified creditors.
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