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Srei Infrastructure files bankruptcy petitions against companies that held Viom shares

October 11, 2017

Srei Infrastructure Finance has filed bankruptcy petitions against Right Tower, Resurgent Infratel and Confident Solar, which are three of the four companies that held and sold Viom Networks shares on Srei’s behalf . The cases were admitted by National Company Law Tribunal (NCLT) as legitimate cases.

It has been reported that these cases will be heard on October 24, 2017 where these companies and Srei Infrastructure Finance will need to present a resolution plan. The Srei Group is being represented by MKB & Associates.

Srei Group held 11 per cent of Viom Networks shares directly while the remaining 7 per cent were held through the four companies. Of these four companies, three are investee companies of Srei Alternative Investment Managers, a 100% arm of Srei Infra, while the fourth is an indirect arm of Opulent Venture Capital Trust, also formed by the Group. In October 2015, Tata group and Srei sold a 51 per cent stake in Viom to American Tower Corporation (ATC) for Rs 76.39 billion. Srei exited entirely for Rs 29.31 billion and also gave up management control while Tata Group and some financial investors partially monetised the stake.

Currently, the four firms under consideration, together, have an outstanding debt of more than Rs 5 billion along with accumulated interest. Earlier, it was reported that these four companies were left with a loss of Rs 4.40 billion at the end of 2015-16. The companies had no other assets or cash flow to service their loans. Even after the sale of Viom Networks shares, they were unable to repay their outstanding debts. The companies then borrowed money from Srei Infra, and the loan amount was increased each year so companies could pay interest on the existing loans. Over five years, these companies paid Rs 5.70 billion as interest on the original loans of Rs 10.05 billion.

 

 
 

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