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Srei Infra to seek govt nod to use Sarfaesi Act

Srei Infra to seek govt nod to use Sarfaesi Act
PTI
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First Published: Tue, Apr 05 2011. 10 40 AM IST
Updated: Tue, Apr 05 2011. 10 40 AM IST
Kolkata: Srei Infrastructure Finance Ltd will soon seek the government’s nod to use the Sarfaesi Act for better recovery management.
“After the new status of infrastructure finance company, we believe that now we are eligible to use the Sarfaesi Act. We will make a presentation before the government,” Srei Infra chairman and managing director Hemant Kanoria told the news agency.
The use of Sarfaesi Act will enable the company to settle recovery disputes faster and dispose of ‘fictitious’ cases and help in better stress asset management, he said.
The Act has helped banks in faster recovery of bad loans through auction of mortgaged property.
On how the company would be benefited from the new status, Kanoria said, “It will help us in reducing cost of funds by 50-100 basis points and we will be able to raise long term funds.”
He also said dependence on bank liability was likely to get reduced from current level of 60%, but the quantity would depend on the cost of funds from other sources.
“We can issue long-term tax-free bonds but will take into consideration the appetite and the cost involved in managing retail investors,” Kanoria said.
Given the current cost of External Commercial Borrowings, tax free bonds with an 8.35-8.5% coupon rate does not seem a lucrative option.
“We will review the market situation and need of resources and then take a call,” Kanoria added.
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First Published: Tue, Apr 05 2011. 10 40 AM IST
More Topics: Srei Infra | Sarfaesi Act | Creditors | Bank | Assets |