Rajnish Sharma, administrator for Srei Infrastructure Finance And Srei Equipment Finance had set Saturday as the deadline for receiving a resolution plan.
This will be the first bid by the state-sponsored National Asset Reconstruction Company.NARCL) for companies passing through bankruptcy process. The government-promoted ARC informed its shareholders last week that it is preparing to submit a plan combining cash and security receipts.
NARCL has appointed alvarez And Marshal To advise on submission of plans for SREI. EY is advising the Srei Administrator on the resolution process. NARCL and Autumn The list of initial bidders for Srei included investments from late entrants. Arena-Verde first submitted a plan but later restarted the sales process.
Rajneesh Sharma did not respond to ET’s request for comment.
‘fit and proper’
NARCL is likely to be the most preferred bidder. Industry experts said that since it is a government-owned entity, the banking regulator will give its nod to it as a ‘fit and proper’ bidder. According to the request for proposal, if the banking regulator finds that the winning bidder has given false information to the administrator, the lenders’ earnest money of Rs 50 crore will be forfeited.
For financial companies undergoing insolvency proceedings, the Reserve Bank of India (RBI) is the final authority to approve the name of the winning bidder who must comply with the regulator’s ‘fit and proper’ norms. This offer by NARCL comes a month after the RBI permitted ARCs with a net owned fund (NOF) of Rs 1,000 crore to submit resolution plans in corporate insolvency cases. NARCL, JM Financial ARC and edelweiss ARCs are among the very few whose NOF is above Rs 1,000 crore.