Singapore-based Payaash Capital, which holds a 49% stake in Trinity Alternative Investment Managers (TAIML), has challenged the inclusion of ArcelorMittal in the final list of the prospective resolution applicants for the two insolvent Srei entities.
In a letter to the administrator, Rajneesh Sharma, Payaash has alleged that it would “disrupt” TAIML from recovering its around `10,000-crore claim from ArcelorMittal.
TAIML is an investment manager managing AIF funds that is promoted by SREI Infrastructure Finance, with a 51% stake.
As many as 16 entities, including AM Mining, an affiliate of ArcelorMittal, Capri Global, National Asset Reconstruction Company (NARCL), and Varde Partners and Arena Investors, have so far submitted their expressions of interest (EOIs) to the administrator of SREI Infrastructure Finance (SIFL) and SREI Equipment Finance (SEFL), which are under the corporate insolvency resolution process.
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Payaash Capital has said: “…TAIML has instituted several legal proceedings against ArcelorMittal Nippon Steel India (hereinafter referred to as “ArcelorMittal”) on account of TAIML’s huge monetary claim against ArcelorMittal to the tune of about `10,000 crore,” says the letter undersigned by Payaash Capital founder Uttam Aggarwal.
“It has, however, recently come to our knowledge through various newspaper reports that you have now allowed ArcelorMittal to submit their expression of interest in the Corporate Insolvency Resolution Process of Srei Infrastructure Finance Limited and by doing so, you in collusion and connivance of ArcelorMittal are now attempting to disrupt TAIML from recovering its debt from ArcelorMittal,” the letter adds.
Notably, the EoI from AM Mining India, an ArcelorMittal affiliate, was received by the administrator on September 27, 2022, ie, after the expiry of the last date of submission of EOI. AM Mining, while citing its reason for delay, also requested for condonation of delay in submission of EOI.
“The EOI submitted by AM Mining India Private Limited, having met the eligibility criteria as per invitation for EOI dated February 25, 2022, was placed before the Committee of Creditors in its meeting held on October 1, 2022, and, after considering all aspects including the value maximisation for all stakeholders including but not limited to banks, financial institutions and retail debenture holders, the CoC approved a resolution to include the name of AM Mining India Private in the final list of Prospective Resolution Applicants,” the administrator informed in his note on October 1.
In a stock exchange filing on November 12, SIFL said the consolidated committee of creditors (CoC) has resolved to extend the deadline for submission of resolution plans for the two NBFCs by the prospective resolution applicants (PRAs) till November 25, 2022. Earlier, the deadline was November 15.
“As you are also aware, by a letter dated 4th October 2022, wherein you are also copied, ArcelorMittal has written to TAIML to withdraw all the litigation filed against ArcelorMittal. You as a majority shareholder of TAIML ought to have immediately responded to ArcelorMittal in the best interest of TAIML but you kept silent on issue thereby proving that you are acting against the interest of TAIML and instead accepting its EOI,” Payaash Capital wrote in its letter, dated October 31, to Rajneesh Sharma.
“You are thereby exposing TAIML to several legal proceedings also from the side of the investors on whose benefit as the investment Manager TAIML has instituted the legal proceedings against ArcelorMittal…” the letter further says.
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In his note, Sharma informed with a view to “maximise the value of the assets” of the corporate debtors for all stakeholders and to accord a fair opportunity to all interested potential resolution applicants, the consolidated CoC in its meeting held on October 1 decided to allow prospective resolution applicants (regardless of whether they appear in the Final List) to submit an EOI to the administrator at the earliest possible date. The administrator received EoIs from Capri Global Holdings and National Asset Reconstruction Company on October 14 and October 14, respectively.
Insolvency proceedings against SIFL and its subsidiary SEFL commenced in October 2021 after insolvency petitions filed by the Reserve Bank of India were approved by the Kolkata bench of the National Company Law Tribunal (NCLT).
