Srei: Srei’s creditors plan to consolidate all debts

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Mumbai: Bankers plan to consolidate the total debt of two Srei companies – Srei Infrastructure Finance and Srei Equipment Finance – to facilitate resolution.

At the first meeting of the Creditors Committee (CoC), the banks agreed to form a central committee to analyze the potential for debt consolidation.

“There are two views between different banks. One thinks consolidation will make it easier to resolve. But the others think it will reduce the value of their debt because some are rated lower in the cascade,” one said. banker aware of the proceedings. . “To eliminate these differences, a central committee has been formed with the major lenders who will decide the way forward.”

The CoC also agreed to appoint the consultancy firm EY as adviser to administrator Rajneesh Sharma. The law firm Shardul Amarchand Mangaldas has been appointed legal advisor to the administrator.

ET reported last week that the administrator of Srei Infrastructure Finance and Srei Equipment Finance was planning to appoint EY as financial advisor.

“EY was selected because of its experience as an adviser in the only RBI-mandated resolution for DHFL, which was reached earlier this year,” said a second person engaged in the deliberations. “The RBI wants to make sure that there are no loopholes and that the process is carried out in a professional manner. The appointment of the legal advisor is important because the administrator may face legal challenges in managing the business. ‘business against the old promoters. ”

Srei Infrastructure and Srei Equipment Finance together owe lenders and bondholders a total of 30,000 crore. UCO Bank is the main lender, with over 2,000 crore exposure. The exposure of the State Bank of India is also over 2,000 crore. Union Bank of India is the third largest lender. Among private banks, Axis Bank has the greatest exposure.

“They are two different companies with different sets of activities. Banks are wary of any consolidation because they have different types of exposure. Some banks can win and others can lose, so they have to be calculated,” he said. declared the person named above.


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