Kolkata, May 2 The counsel appearing on behalf of Authum Investment and Infrastructure on Tuesday argued about the evaluation matrix that gave the National Asset Reconstruction Company (NARCL) a higher score in the bid submitted for Srei group companies. The Kolkata bench of National Company Law Tribunal (NCLT) will continue further hearing on the matter on Wednesday.

Following the completion of the challenge mechanism process, the Srei group entities had received three bids. The consolidated CoC for two insolvent Srei companies approved NARCL’s offer of ₹5,555 crore in NPV terms including upfront cash of ₹3,180 crore, with the highest voting (89.25 per cent) amongst the bidders. The resolution plan submitted by Authum Investment and Infrastructure (₹5,526 crore in NPV terms) received 84.86 per cent vote and that of the consortium of Varde Partners and Arena Investors (₹4,680 crore in NPV terms) got 9 per cent vote.

Authum Investment and Infrastructure, whose financial bid was adjudged the second-highest in terms of NPV, filed a petition before the Kolkata bench of NCLT raising question over the evaluation matrix.

In an earlier hearing last week, the counsel appearing on behalf of debenture shareholders had also raised questions over the evaluation matrix that gave NARCL a higher score and had said there is “no certainty of recovery” out of the underlying assets of the corporate debtor and hence the repayment to creditors could be impacted.

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The counsel further argued that as per the final resolution plan submitted by NARCL, the security receipts to be issued to the creditors would be by way of redemption of secured non-convertible debentures and there is no guarantee whatsoever that it could be redeemed at the expected price.

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The Kolkata bench of NCLT, on October 8, 2021, gave its approval to start insolvency proceedings against the two companies after the Reserve Bank of India filed insolvency applications against the two companies.

The RBI-appointed administrator has admitted claims of around Rs 31,868 crore of the total claims received of around Rs 34,223 crore from financial creditors to Srei Equipment Finance Ltd (SEFL). He had also admitted claims to the tune of Rs 257 crore from financial creditors to Srei Infrastructure Finance.

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