Cyril Amarchand Mangaldas Advised NARCL and IDRCL on CIRP of SREI Firms
Cyril Amarchand Mangaldas (CAM) advised and represented National Asset Reconstruction Company Limited (NARCL) and India
Cyril Amarchand Mangaldas Advised NARCL and IDRCL on CIRP of SREI Firms
Cyril Amarchand Mangaldas (CAM) advised and represented National Asset Reconstruction Company Limited (NARCL) and India Det Resolution Company Limited (IDRCL) in their INR 33,000 crore consolidated resolution plan for SREI Infrastructure Finance Limited (SIFL) and SREI Equipment Finance Limited (SEFL) (collectively referred as “Target Companies”). This intricate process involved navigating the Corporate Insolvency Resolution Process (CIRP) mandated by the Insolvency and Bankruptcy Code, 2016 (IBC). Both SIFL and SEFL are classified as systemically important non-deposit-taking non-banking financial companies, with SEFL operating as a wholly-owned subsidiary of SIFL.
Following the supersession of the Target Companies' boards by the Reserve Bank of India (RBI) on October 4, 2021, Mr. Rajneesh Sharma was appointed as the Administrator. Subsequently, upon applications from the RBI, the Kolkata Bench of the National Company Law Tribunal (NCLT) initiated the CIRPs for both SIFL and SEFL. Recognizing synergies between the companies, the NCLT approved the consolidation of their CIRPs on February 14, 2022. This directive also involved forming a single Committee Of Creditors (CoC) to oversee the combined CIRP.
The resolution plan submitted by NARCL (Resolution Plan) secured approval from the CoC on February 14, 2023, with a staggering 89.25% majority vote. The NCLT then endorsed the Resolution Plan on August 11, 2023. Throughout the CIRP, Cyril Amarchand Mangaldas served as advisors and represented NARCL and IDRCL, culminating in the successful NCLT approval and implementation of the Resolution Plan.
Beyond the initial advisory role, the Firm's contributions included conducting due diligence on the Target Companies, drafting and negotiating the Resolution Plan, and representing NARCL in various court proceedings before the NCLT, the National Company Law Appellate Tribunal (NCLAT), and the Supreme Court. Since the Resolution Plan's approval, the Firm's involvement has extended to implementation, encompassing tasks like drafting and negotiating definitive agreements, providing guidance on secretarial compliances, and liaising with regulatory bodies such as the RBI, the Competition Commission of India (CCI), and stock exchanges to obtain necessary approvals.
The various legal practices of Cyril Amarchand Mangaldas including Insolvency and Restructuring, Disputes, General Corporate, and Competition Law, played a vital role in this endeavour. The Transaction Team, led by Partner Dhananjay Kumar with support from Principal Associate Annie Jain and Associate Jayesh Karnawat, operated under the overall supervision of Partner & Co-Head of Banking and Finance, Amey Pathak.
Partner Surya Sreenivasan oversaw the Resolution Plan's implementation, assisted by Principal Associates Nandita Menon and Annie Jain, Senior Associate Medha Rao, and Associates Jayesh Karnawat, Sneha Sharma, and Vihit Shah. The entire team's efforts were guided by Partner Dhananjay Kumar.
The Diligence Team, led by Partner Dhananjay Kumar and Consultant Harita Rao, included Associates Jayesh Karnawat, Tushar Kumar, Parnika Jain, and Khushi Maheshwari.
NCLAT litigation matters were handled by Partner Raunak Dhillon, with support from Principal Associates Anush Mathkar and Annie Jain, Associates Jayesh Karnawat and Nihaad Dewan, all under the supervision of Partner Dhananjay Kumar.
Additional parties and advisors to the transaction included Mr. Rajneesh Sharma, acting as the administrator for SREI Infrastructure Finance Limited and Srei Equipment Finance Limited; SBI Capital Markets Limited, serving as the financial advisor for the Committee of Creditors; and Ernst & Young, acting as the transaction advisor for the administrator.
The transaction, signed on January 18, 2023, and concluded on December 8, 2023, represents a significant milestone in India's financial restructuring landscape.