NARCL becomes highest bidder for SREI with NPV of Rs 5,555 crore; details here

The highest bidder in an auction for the finance firms SREI Infrastructure Finance and SREI Equipment Finance, has turned out to be National Asset Reconstruction Company Ltd (NARCL). The auction had started on Tuesday and the NARCL’s bid was the highest at Net Present Value (NPV) of Rs 5,555 crore. There were just two bidders in the fray in the final lap, namely NARCL, and Authum Investment and Infrastructure with an NPV of Rs 5,526 crore. The bid by NARCL includes an upfront cash of Rs 3,000 crore and issuance of optionally convertible bonds of value Rs 6,000 crore, according to a Business Standard report. In the auction, the Varde Partners and Arena consortium was also in the fray in the beginning, but it dropped out in the final round. The Committee of Creditors’ (CoC’s) meeting continued till around 1 AM as the auction involved five rounds. Now, the lenders are going to look into the final resolution plan and conditions therein. CoC is expected to meet on 7 January as per reports. It has been made clear by the NARCL that it is not going to provide government-backed guarantees. The total value of resolution plans submitted by the applicants involved upfront cash payout and deferred payments via instruments such as debentures. A timeline for clearing dues ranges between three-seven years. The Reserve Bank of India (RBI) superseded the boards of SREI Infrastructure Finance and SREI Equipment Finance in October 2021. It was done for the insolvency proceedings because of governance concerns and payment defaults by the firms. The central bank also appointed Rajneesh Sharma, ex- chief general manager of Bank of Baroda as the administrator of these companies. Claims totalling over Rs 32,000 crore have been admitted by the financial creditors including Punjab and Sind Bank, State Bank of India, Axis Bank, HDFC Bank, Union Bank of India, IDBI Bank, UCO Bank and Indian Overseas Bank. NARCL has been established by the banks for aggregating and consolidating stressed assets for subsequent resolution. It was incorporated under the Companies Act and has applied to the RBI for a license as an Asset Reconstruction Company (ARC). Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .