SREI Group’s non-bank finance companies have seen interest from at least five potential bidders, according to two people in the know. A Reserve Bank of India initiated insolvency process is currently underway for SREI Infrastructure Finance Ltd and SREI Equipment Finance Ltd.
The potential bidders who have so far submitted a formal expression of interest include JM Financial Asset Reconstruction Company Ltd, Asset Reconstruction Company of India Ltd, ACRE Asset Reconstruction Company Ltd, Jindal Power Ltd and Welspun Group, the people quoted above confirmed.
Queries sent to JM Financial ARC, ARCIL, ACRE ARC, Welspun Group and the Reserve Bank of India administrator at the SREI Group NBFCs were not immediately responded to. A spokesperson for Jindal Power declined to comment.
The deadline for submitting the expression of interest for assets of SREI Infrastructure Finance Ltd and SREI Equipment Finance Ltd ends late in the evening on Saturday, the people quoted above said. The financial creditors to the two non-bank lenders are conducting a consolidated insolvency proceeding, after the National Company Law Tribunal approved it last month.
While there is no provision in the Insolvency & Bankruptcy Code for a group insolvency proceeding, the NCLT can approve such proposals by the creditors, for quicker resolution.
The consolidated loan book of the two companies stood at Rs 28,455 crore as of Sept. 30, 2021, according to an internal presentation circulated among creditors. Of this, nearly 79% or Rs 22,463 crore worth of loans have been classified as non-performing, BloombergQuint had reported.
According to data available on the SREI Group website, financial creditors have claims worth Rs 10,727.49 crore against SREI Infrastructure Finance and Rs 31,867.75 crore against SREI Equipment Finance.
The two non-bank lenders were referred for insolvency proceedings by the RBI in Oct 2021, after the regulator found governance concerns and defaults by them. The regulator had superseded the boards of the two companies and appointed Rajneesh Sharma as administrator to manage them.