Authum Investment & Infrastructure, the losing bidder in the takeover battle for the Srei twins has appealled against the National Compay Law Tribunal (NCLT) order approving the resolution plan of the National Asset Reconstruction Co Ltd (NARCL). Also, in a new twist to the tale, the Mumbai based NBFC has increased its offer for the Kolkata based companies by another Rs 450 crore, people familiar with the matter said.
On Wednesday, a two judge bench of the National Company Law Appellate Tribunal (NCLAT) issued notices to the committee of creditors (CoC), NARCL, Reserve Bank of India (RBI) and administrator Rajneesh Sharma on the appeal filed by Authum, giving the respondents two weeks to reply to the notice. Authum will get another two weeks after the respondents file their reply. The court has listed the appeal for admission or disposal on October 4, an order by NCLAT chairman Ashok Bhushan and technical member Barun Mitra said.
ET had reported about the possibility of Authum filing an appeal in its August 12 edition.
The Mumbai based NBFC has challenged the NCLT decision arguing that its offer for Srei Infrastructure Finance and Srei Equipment Finance is better than rival NARCL and the UCO Bank led CoC has approved the bad bank’s plan based on what it calls is a flawed evaluation matrix.
“This revised offer is 7% to 10% higher than the previous one and is now head and shoulders above the NARCL one. Authum thinks that the court cannot ignore a better offer even if it is so late in the day and is relying on recent examples like in the case of Reliance Capital where Hinduja trumped an offer by Torrent at a late stage,” said a person familiar with the case.
Authum did not reply to an email seeking comment.
The Hinduja Group which emerged as the sole bidder for Anil Ambani’s Reliance Capital in April was initially beaten by Torrent Investments. Hinduja Group’s Rs 9650 crore was more than Rs 1000 crore offered by Torrent. But to be sure, Hinduja’s revised bids though late in the day, were still much before the NCLT had approved the plans which is not the case in the Srei companies.
In February, 87% of verified creditors voted in favour of NARCL’s resolution plan, while 77% voted for Authum.
NARCL had offered Rs 5,555 crore on a net present value (NPV) basis for the assets, while Authum Investment offered Rs 5,526 crore.
“With the additional Rs 450 crore offered Authum, its offer is now close to Rs 6000 crore which is above what NARCL has offered. However, interestingly the court has not stayed the implementation of the resolution plan by NARCL which itself is some kind of indication,” said a second person aware of the issues.
The court has however clarified that its directions after hearing all parties on October 4 will have to abided by everyone.
Senior Supreme Court advocate Kapil Sibal appeared for Authum, while Arun Kathpalia, appearing for the CoC, Abhinav Vashisht, represented NARCL while senior counsel Gopal Jain, appeared for RBI and Krishnendu Datta, appeared for administrator Rajneesh Sharma.
Separately, an appeal filed by Adisri Commercial Pvt. Ltd, a company representing the shareholders and promoters of Srei against RBI’s decision to start insolvency proceedings against the companies was also taken up by the court on Wednesday and was posted for further hearing on September 25.
Senior advocate Gopal Jain representing RBI prayed for three weeks’ time to file a reply which was granted by the court. The appellants have two weeks after that to file a rejoinder.
“Though all these appeals are now pending, the resolution plan has not been stayed for now. But yes there is now a risk that the legal issues could delay resolution for these companies,” the second person cited above said.
The administrator had admitted Rs 32,750 crore in claims from verified creditors. The offer by NARCL will equate to a recovery of 17% on an NPV basis.
