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    NARCL, Arena-Varde, Authum offer resolution plans for Srei

    Synopsis

    NARCL has appointed Alvarez and Marsal to advise it on submitting the plan for Srei. EY is advising the Srei administrator on the resolution process.

    India's bad bank NARCL proposes to buy 5 distressed loan accountsAgencies
    A government-sponsored bad bank, a consortium of Arena Investors and Varde Partners, and Authum Investment and Infrastructure have submitted separate insolvency resolution plans for the Kolkata-based twin Srei companies, three people aware of the development told ET.

    Rajnish Sharma, administrator for Srei Infrastructure Finance and Srei Equipment Finance, had set Saturday as the deadline for receiving resolution plans.

    This will be the first bid by the state-sponsored National Asset Reconstruction Co (NARCL) for companies undergoing the bankruptcy process. The government-promoted ARC last week informed its shareholders that it is preparing to submit a plan comprising a combination of cash and security receipts.

    NARCL has appointed Alvarez and Marsal to advise it on submitting the plan for Srei. EY is advising the Srei administrator on the resolution process.

    NARCL and Authum Investment were among the late entrants to the list of initial bidders for Srei. Arena-Varde submitted a plan earlier but subsequently, the sale process restarted.

    Rajnish Sharma did not respond to ET's request for comments.

    badbank


    'Fit and Proper'
    NARCL will likely be the most preferred bidder. Since it is a government-owned entity, the banking regulator will give its approval to it being a 'fit and proper' bidder, industry experts said. According to the request for proposal, lenders would forfeit the Rs 50-crore earnest money deposit if the banking regulator discovers that the winning bidder provided inaccurate information to the administrator.

    For finance companies undergoing bankruptcy proceedings, the Reserve Bank of India (RBI) is the final authority to approve the name of the winning bidder that must comply with the regulator's 'fit and proper' rules. The offer by NARCL comes a month after RBI allowed ARCs with Rs 1,000 crore net owned funds (NOF) to submit resolution plans in cases of corporate insolvency. NARCL, JM Financial ARC and Edelweiss ARC are among the few that have NOFs exceeding Rs 1,000 crore.



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