srei resolution: Lenders of two Srei companies extend offer deadline by a month

Lenders to two distressed infrastructure financiers of the Srei Group have extended the deadline for accepting resolution plans by a month to November 15. This follows requests from ArcelorMittal-promoted AM Mining India, Edelweiss Alternative Asset Advisors and Prudent ARC, people aware of the development told ET.

After lenders restarted the sale process of Srei Equipment Finance and Srei Infrastructure Finance, administrator Rajnish Sharma had set a deadline of October 15 for accepting resolution plans.

The three potential buyers that have submitted expressions of interest separately wanted more time to conduct due diligence.

ArcelorMittal’s surprise expression of interest for the twin Srei companies last month is linked to its ongoing dispute with Srei Infrastructure Finance regarding Odisha Slurry Pipeline Infrastructure (OSPIL).

The 253-km pipeline transports raw materials to the Essar Steel pellet plant that is now acquired by ArcelorMittal Nippon Steel India, under the Insolvency and Bankruptcy Code (IBC).

Srei Infrastructure Finance petitioned the Supreme Court against Arcelor Mittal objecting to the distribution of proceeds from the sale of OSPIL, claiming discrimination among the same class of creditors.

Edelweiss is also considering making an offer for Srei since the central bank this week allowed asset reconstruction companies, with ₹1,000 crore in net owned funds, to bid for companies under insolvency. Edelweiss fund may submit a plan in partnership with Edelweiss ARC since the latter has a NOF of more than ₹1,000 crore, said a bank official.

Lenders had restarted the sale process of the Kolkata-based financiers after the terms of the request for proposal (RFP) were revised. Lenders lowered earnest money deposits (EMD) to ₹50 crore from ₹150 crore, and the performance bank guarantee was reduced to a minimum of ₹300 crore from ₹500 crore.

The new RFP says that the ₹50 crore EMD would be forfeited if the Reserve Bank of India (RBI) does not endorse the winning bidder.

The RFP was revised to end the deadlock between the joint bidder – Arena Investors in partnership with Varde Partners – and lenders over the submission of unconditional EMD. The duo had submitted conditional EMDs, something not acceptable to lenders.

The twin Srei companies entered the corporate insolvency process a year ago. The resolution professional has received ₹32,750 crore in verified claims.