The promoters of Srei present a new resolution plan to exit the bankruptcy

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The promoters of Srei Group have filed a new resolution plan under section 12A of the Insolvency and Bankruptcy Code (IBC) with the administrator of Srei. The promoters have offered to pay fees of about $32,000 crores to creditors to withdraw their companies from the ongoing insolvency process.

Section 12A of the IBC allows corporate debtors’ administration to settle matters between creditors and withdraw cases under the Corporate Insolvency Resolution Process (CIRP).

The bid from developers Srei Kanorias was the highest with a net present value of $7,000 crores including initial cash from $Rs 3.5 billion, PTI reported citing sources.

The remaining debt will be paid through a combination of financial instruments such as cash, non-convertible debentures (NCD), optionally convertible debentures (OCD) and equity over a five-year period, PTI reported.

If such a resolution plan arrives, it will be reviewed to see if it qualifies IBC U/S 12A and then the CoC will make a decision, the bankers said.

Currently, the voting process for the three resolution plans submitted by the potential resolution applicants (PRAs) for Srei Infrastructure Finance and Srei Equipment Finance is underway and will continue until February 14. The Creditors Committee was supposed to meet on February 15 to finalize it.

After completing the challenge mechanism process, the Srei companies received three offers. The state-backed NACL offered a net present value (NPV) offering of $5,555 crores.

The offer from August Investment and Infrastructure was for $5,526 crores, while the consortium of Varde Partners and Arena Investors submitted a financial offer of approximately $4,680 crores.

The former promoters attempted to make a full payment with interest under Section 230 in October 2020, but the offer was rejected.

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