A consortium of Arena Investors LP and Varde Partners, National Asset Reconstruction Co. Ltd (NARCL) and Mumbai-based Authum Investments have submitted final bids for the Srei group of companies under the insolvency and bankruptcy process.
The investors have submitted the resolution plan, earnest money deposit (EMD) and bank guarantee as part of the bid. The committee of creditors (Co) will meet next week to discuss the resolution plans received.
“CoC will read the entire resolution plan and take legal advice to see if the bids have fully complied with the IBC law. Thereafter, the CoC will negotiate the amount of bidding," said a person aware of the matter.
In October 2021, the Reserve Bank of India referred Srei Infrastructure Finance and Srei Equipment Finance for bankruptcy after the boards of companies were superseded by the central bank, and an administrator was appointed. Forty-four lenders have made claims of ₹32,750 crore against the companies.
NARCL’s bid, the first under the IBC process, comes after RBI allowed asset reconstruction companies with ₹1,000 crore of net owned funds (NOF) to bid for assets under the insolvency process. It has appointed Alvarez and Marsal to advise it on the resolution plan. EY is advising the Srei administrator on the resolution process.
Mumbai-based Authum Investment & Infrastructure is already acquiring Reliance Home Finance and Reliance Commercial Finance. It also bid for part of the assets of Reliance Capital last week.
Varde Partners is a global alternative investment firm based in London, and it has jointly bid with Arena Investors, a New York-based investment firm. The offer size of the three bidders is not known yet.
Emails to Varde Partners, Authum Investments and NARCL did not elicit any response.
The resolution process for Srei group companies generated a lot of interest among potential bidders, including Arcelor Mittal and Capri Global, who finally did not submit bids.
Last month Srei’s administrator told the stock exchanges that Srei’s auditor BDO had found frauds worth ₹13,110 crore as of September-end. Before this, the company reported fraudulent transactions of around ₹5,100 crore through two separate disclosures in the stock exchange.
The National Company Law Tribunal has extended the time till 5 January next year to complete the insolvency resolution process for Srei Infrastructure Finance.