Srei's CoC to take cognizance of the valuation report on Friday

The Committee of Creditors (CoC) of Srei lenders will take cognizance of the valuation report of the twin Srei Group companies undergoing a resolution process on Friday, a source said on Thursday.

If the fair and liquidation value of Srei Infrastructure Finance and Srei Equipment Finance will be greater than the resolution plans submitted by the three bidders, the CoC may not consider them.

"There is a CoC meeting tomorrow (January 6). A presentation will be made before the CoC on the valuation. The lenders will take cognizance of the valuation report as part of the ongoing resolution process," the source said, declining to be identified.

According to the sources, the valuation reports will not come in the way of the ongoing resolution process. The financial proposals were received on Wednesday after online bidding in a "challenge mechanism" process, adopted by the administrator Rajneesh Sharma, available under the Insolvency and Bankruptcy Code, to maximise the recovery.

"The resolution proposals are well above the valuation reports as per indications available so far. Independent valuers Kakode & Associates and GAA have pegged the liquidation valuation at around Rs 6,000 crore and a fair valuation of around Rs 9,000 crore," the sources pointed out.

The government-backed National Asset Reconstruction Company Ltd has taken the lead in taking over the two stressed entities of the Srei group as its financial proposal on Wednesday was a winner with the "highest net present value bid of Rs 5,555 crore".

The Reserve Bank of India superseded the boards of Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd for insolvency proceedings due to governance concerns and repayment defaults.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 commenced in October 2021 after insolvency petitions filed by the RBI were approved by the Kolkata bench of the National Company Law Tribunal (NCLT).