Vedanta, Jindal Power among 17 to show interest in SREI resolution

Resolution plan by April 30, but deadline can be stretched on request

The resolution for the two SREI group companies generated huge interest from investors with 17 entities submitting expression of interest (EOI) that was floated by the Reserve Bank of India (RBI) appointed administrator for the resolution of the companies under the corporate insolvency resolution process (CIRP).

The deadline of the EoI which was invited for a resolution plan for SREI Equipment Finance (SEFL) and SREI Infrastructure Finance (SIFL) under group insolvency, expired on Saturday.

From private equity firms to business conglomerates like Vedanta, Welspun group and Jindal Power to financial services and asset reconstruction companies like Edelweiss Financial Services and JM Financial ARC has shown interest in acquiring the Srei companies, multiple sources confirmed Business Standard.

Sources said private equity firm Charlestown Capital Advisors and Star Asia Group have also jointly submitted an EOI. Another US-based firm Arena Investors has also evinced interest. Interestingly, Arena was interested in investing Rs 2,000 crore in SREI Equipment Finance Ltd before the RBI superseded the boards of the two companies. Sources also said the Adani group is also open to partnering with an investor for the resolution but the group has not formally submitted a proposal.

The investors will now study the financials and all other aspects of the two group companies before submitting a resolution plan. Sources said the resolution plan needs to be submitted by April 30, though the deadline can be extended if a request is made. “The aim is to complete the resolution process as early as possible to mitigate the losses of the banks and other stakeholders,” said a source aware of the development.

In October 2021, RBI superseded the boards of Srei Infrastructure Finance and Srei Equipment Finance owing to governance concern and payment defaults by these companies. Rajneesh Sharma, a former chief general manager of Bank of Baroda was appointed as the Administrator of the companies by the Reserve Bank of India.

Query sent to Vedanta and JM Financial went unanswered. Sources close to Jindal Power Ltd confirmed having submitted an EOI. An email sent to the Srei administrator remained unanswered till the time of publishing the story.

As of January 31, 2022, the total amount of admitted claims of commercial banks stood at Rs 22,964.64 crore while total admitted claims including domestic institutions and ECB lenders was Rs 31,918.46 crore.

The main focus of the SREI administrator since the supersession has been to improve asset quality to generate investor interest.

At the end of the December quarter, SIFL reported a consolidated net profit of Rs 69.82 crore compared to a net loss of Rs 1,968.26 crore in the previous quarter.