NARCL emerges as the highest bidder for SREI with NPV of Rs 5,555 cr

National Asset Reconstruction Company Ltd (NARCL) emerged as the highest bidder in the auction for two finance companies - Srei Infrastructure Finance and Srei Equipment Finance – which began on Tuesday. NARCL's bid was the highest with a Net Present Value (NPV) of Rs 5,555 crore.

In the final lap, there were just two bidders in the fray - NARCL, and Authum with an NPV of Rs 5,526 crore.

NARCL's bid includes upfront cash of Rs 3,000 crore and issuance of optionally convertible bonds worth Rs 6,000 crore, banking sources said.

Three bidders - Varde Partners and Arena consortium, NARCL and Authum Investment and Infrastructure – were in the fray in the auction which was held on an electronic platform.

The meeting of the Committee of Creditors (CoC) went beyond midnight till around 1 am as the auction involved five rounds, they added.

The total value of resolution plans submitted by the applicants involves upfront cash payout and deferred payments by way of instruments like debentures. A timeline to clear the dues ranges between 3-7 years.

Now lenders will look into the final resolution plan and conditions therein. COC is likely to meet on January 7, 2023, sources said.

NARCL, where public sector banks hold a majority stake, has made it clear that it will not be able to offer government-backed guarantees.

In October 2021, the Reserve Bank of India (RBI) superseded the boards of Srei Infrastructure Finance and Srei Equipment Finance for insolvency proceedings due to governance concerns and payment defaults by them. It also appointed Rajneesh Sharma, ex- chief general manager, Bank of Baroda, as the administrator of the aforesaid companies.

Financial creditors have admitted claims totalling over Rs 32,000 crore. Financial lenders include State Bank of India, Punjab and Sind Bank, Axis Bank, HDFC Bank, Union Bank of India, IDBI Bank, UCO Bank, and Indian Overseas Bank.