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    Srei lenders extend bid timeline to July 30

    Synopsis

    The committee of creditors took both decisions on June 24, the people said. Earlier, Rajneesh Sharma, the administrator of Srei Infrastructure Finance and Srei Equipment Finance, had set June 30 as the deadline for accepting resolution plans.

    SreiETBFSI
    Financial creditors have about ₹32,000 crore of claims against the two debt-laden companies.

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    Mumbai: Lenders to the twin Srei companies undergoing insolvency proceedings have mandated Dun and Bradstreet to conduct a techno-economic viability (TEV) study and extended the deadline for accepting the resolution plans by a month to July 30, said people aware of the development.

    The committee of creditors took both decisions on June 24, the people said. Earlier, Rajneesh Sharma, the administrator of Srei Infrastructure Finance and Srei Equipment Finance, had set June 30 as the deadline for accepting resolution plans.

    Lenders usually undertake a TEV study before restructuring a debt account as it helps to understand the degree of the risk involved in a project. In this case, the TEV study would enable buyers to evaluate the potential upside as well as the risk in acquiring the business, said a person cited above.
    Srei Lenders Extend Bid Timeline to July 30
    The administrator did not respond to ET's queries.

    Various potential resolution applicants were "seeking extension of the timeline given the complexities involved in the due diligence process," said a note circulated by the administrator.

    "Lenders are hoping to complete the process by September 4, but it appears to be wishful thinking given the series of litigations involved in this case," said a senior bank executive with debt exposure to both Srei companies.

    "As it is, a battle is brewing between the administrator and Srei promoter Hemant Kanoria, who is going that extra mile to prevent the accounts from being classified as fraud," said a third person aware of the development.

    A fortnight ago, the administrator informed the stock exchange that a transaction auditor, BDO India, reported a fraudulent transaction in the case of Srei Equipment Finance amounting to ₹2,512 crore and a notional loss of ₹513.8 crore.

    Kanoria Foundation issued a statement questioning the methodology adopted by BDO, terming the approach as opaque.

    In April, the promoter had approached the banking regulator to advise lenders not to act on the KPMG report that raised questions about ₹8,158 crore in connected-party transactions.

    Separately, following a petition by Kanoria, the Delhi High Court on April 22 directed lenders not to take any action against the twin Srei companies until the next hearing after Punjab & Sind Bank classified both accounts as fraud. The hearing is scheduled for August 23.

    Financial creditors have about ₹32,000 crore of claims against the two debt-laden companies.




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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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