Singapore-based Payash Capital objects to Arcelor inclusion in Srei bidding

Singapore-based Payash Capital, a 49 per cent stakeholder in Trinity Alternative Investment Managers Limited (TAIML), has opposed the decision of the administrator to include ArcelorMittal as a bidder for SREI assets under insolvency proceedings.

In a letter to the administrator, Rajneesh Sharma, of SREI Infrastructure Finance Limited, Payash Capital said, ArcelorMittal Group is not competent to apply for bid of SIFL since ArcelorMittal has zilch expertise in the field of finance business.

TAIML is an investment manager managing AIF (Alternative Investment Fund) that is jointly promoted by SREI Infrastructure Finance Limited (SIFL) with 51 per cent stake, and balance 49 per cent held by Payash Capital Singapore PTE Limited.

Payash Capital in the letter dated October 31, 2022 has objected to the inclusion of ArcelorMittal in bidding for SREI assets as it would hinder and disrupt the ongoing recovery proceedings by TAIML against ArcelorMittal.

TAIML and ArcelorMittal have been engaged in a legal battle over payments of dues in Odisha Slurry Pipeline Infrastructure Limited.

ArcelorMittal had acquired 100 per cent stake in Odisha Slurry Pipeline Infrastructure Limited through its acquisition of Essar Steel in 2019 through Insolvency and Bankruptcy Code (IBC), wherein 70 per cent were initially held by India Growth Opportunities Fund (IGOF), a scheme of Srei Multiple Asset Investment Trust (SMAIT). SMAIT is managed by TAIML.

Payash Capital has expressed concerns that if ArcelorMittal entity bids are accepted and SREI data rooms are made available to them, it will compromise numerous confidential documents pertaining to TAIML litigation with the former group.

It create a situation wherein they may be pressurised into withdrawing all litigations, the letter claimed.

So far, the administrator has received interest from 5 bidders to acquire SREI assets -- Shon Randhawa and Rajesh Shah combine, consortium of Varde partners and Arena Investors, Capri Global, ArcelorMittal promoted AM Mining India, and Edelweiss ARC.

The last date of completion of the resolution process was recently extended to January 5, while that of submitting the final bids with a resolution plan to November 25.

Last year, the Reserve Bank of India (RBI) superseded the board of debt-ridden Srei Infrastructure Finance Ltd and Srei Equipment Finance Limited and appointed an administrator as part of the insolvency process.

It is estimated that Srei Infrastructure Finance Ltd and Srei Equipment Finance Limited have total liabilities of around Rs 18,000 crore in bank loans, and another nearly Rs 10,000 crore of external commercial borrowings and bonds.