NARCL acquires two SREI companies under the insolvency resolution

Paves way for resolution of debt worth Rs 32,700 cr

National Asset Reconstruction Company (NARCL) has acquired two SREI companies – SREI Equipment Finance and SREI Infrastructure Finance – under the Insolvency and Bankruptcy Code, 2016 (IBC).

The documents for the transaction were signed on Friday.

The implementation of the consolidated plan would result in the resolution of financial debt worth Rs 32,700 crore and entails about 50 per cent recovery upfront for lenders.

NARCL in a statement said there is potential for substantial upside built in for lenders over and above the committed payment in the resolution plan.

In August this year, NARCL won the bid under the IBC process. 

NARCL has paid Rs 50 per cent of the committed resolution amount to the lending consortium.

N. Sundar, managing director and chief executive officer (CEO) of NARCL, said: “We are aiming to revive SREI’s equipment lending business and work with all stakeholders to derive optimum value for both the entities. The endeavour would also be to maximise recovery for the lenders in a transparent and time-bound manner.”

The resolution plan has received approval from the National Company Law Tribunal (NCLT), the Reserve Bank of India (RBI), and the Competition Commission of India (CCI).

According to the annual report for FY23, NARCL  made binding offers for the acquisition of 30 accounts with a debt exposure of Rs 1.70 trillion (including two accounts with debt exposure of Rs 33,000 crore for which NARCL submitted a consolidated plan as a resolution applicant).

Further, 29 identified accounts with business potential of Rs 65,000 crore are at various stages of evaluation.