Srei Equipment Finance Ltd (SEFL) said on Saturday that it had appointed KPMG Assurance and Consulting Services LLP and DMKH & Co, chartered accountants, to conduct a forensic audit as part of its proposed debt realignment and good governance processes, respectively.
Srei has been in discussions with lenders for debt realignment. But lenders are unlikely to approve it without a forensic audit. Srei’s consolidated borrowings at the end of September 30, 2020, was at Rs 30,000 crore.
Meanwhile SEFL announced that it had further received an expression of interest (EoI) for capital infusion from Cerberus Global Investments BV. Earlier, it had received EoIs for capital infusion of about $250 million from US-based multi-strategy investment firm, Arena Investors LP, and Singapore-based global financial services company Makara Capital Partners.
SEFL said that discussions had proceeded with both Arena Investors and Makara Capital and the company’s strategic coordination committee (SCC), chaired by independent director Malay Mukherjee, was currently engaged in discussions with the private equity (PE) funds to bring capital into the business.
The SCC had been running an independent process for investments in SEFL and many large players had evinced interest, the company said. “The proposed capital infusion, which is being carried out in parallel with the company’s debt realignment plan, is expected to provide cushion against the pandemic induced stress in the Indian financial services space. Ernst & Young (EY) is advising the SCC on the fund raising exercise,” it added.
The company also said that anticipating the impact of Covid-19 on its customers and the cascading effect the pandemic would have on its loan recovery efforts, SEFL had approached the National Company Law Tribunal (NCLT) with a scheme that proposed repayment of the loans it had taken in an orderly manner over a period of time.
“SEFL plans to repay its loans through the recoveries and hence the scheme was submitted to all the creditors to realign the repayment schedule with expected collections from customers. The lenders also have the flexibility to make necessary amendments in the proposed schemes,” it added.
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