State-owned asset reconstruction company NARCL, after the completion of the takeover of two Srei group firms through the NCLT route, is expected to retain only one, official sources said.
The Calcutta bench of the National Company Law Tribunal (NCLT) has approved the resolution plan of NARCL for the takeover of the two Srei firms under Insolvency and Bankruptcy Code.
The resolution plan had already received approval from the banking sector regulator Reserve Bank of India.
NARCL emerged as the winning bidder for the two Srei group firms — Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL) — through a bidding process in February.
“According to the resolution plan submitted, the National Asset Reconstruction Company Ltd (NARCL) will cease all fresh lending activities in the group’s equipment financing arm — SEFL, and after recovering the outstanding debt, it will be ‘wound up’,” the official said.
The loan repayment process may extend for the next seven years, he said.
At present, most of the assets remain within SEFL’s books due to a previous restructuring.
“As outlined in the resolution plan, NARCL, upon assuming control of the companies, will abstain from pursuing fresh lending from SEFL. The non-banking financial company (NBFC) will be dissolved once its outstanding debt is recuperated and ongoing court cases are settled,” an official close to the development said.
“SIFL with a cleaner balance sheet and a few legal imbroglios will be revitalised, and fresh lending operations will be conducted under this entity. Regulatory authorities are also aligned with this perspective, as previously discussed,” the official said.
This strategy aims at ensuring business continuity and safeguarding employment.
Kanorias, the erstwhile promoters, did not offer any comments on the development. No official comments were received from NARCL.
On February 15, the Committee of Creditors (CoC) for the Srei group firms endorsed NARCL’s resolution plan, which garnered the highest vote share of 89.2 per cent. There were three final contenders for Srei companies.
