Insolvency NARCL wins bids for two Srei companies undergoing insolvency
Mumbai/IBNS: National Asset Reconstruction Company Ltd (NARCL) has won the bid for Srei group's two companies—Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd, media reports said.
The Committee of Creditors on Wednesday approved the plan submitted by NARCL to take over two companies undergoing insolvency proceedings, a report in the media said.
NARCL has been set up by banks to aggregate and consolidate stressed assets for their subsequent resolution. PSBs maintain 51% ownership in NARCL.
The government-backed entity offered a Net Present Value (NPV) bid of Rs 5,555 crore.
A letter of intent will be issued to NARCL and the Srei administrator will send the NARCL plan to RBI for approval and also submit the results before NCLT by February 18, according to the report.
The total value of NARCL's plan stood at Rs 14,301 crore with a cash component of Rs 3,001 crore, debentures and security receipts worth Rs 3,300 crore, and an uncommitted payment of Rs 8,000 crore, the report said.
These uncommitted payments are conditional and subject to recovery from underlying assets over the next seven years, according to the report.
Considering a full recovery, creditors had taken a haircut of 55 percent of the uncommitted value of Rs 8,000 crore, said the report.
The Reserve Bank of India took control of the boards of Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd in October 2021 due to governance concerns and repayment defaults.
The apex bank applied with the NCLT Kolkata to start the insolvency proceedings against the two companies.
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