UltraTech's contention is that its letter revising its bid came when voting on the bids were underway, and hence it should have been considered
Dalmia Cement's Rajputana Properties which had bid for Binani Cement has refused to revise its bid and has instead strongly objected to the Committee of Creditors (CoC) considering the revised bid put in by UltraTech after bidding process was complete.
It said that the eligibility of UltraTech under the Insolvency and Bankruptcy Code (IBC) should be first decided before asking for revised bids.
In a letter to the CoC and the Resolution professional, Dalmia said, "CoC cannot consider UltraTech's resolution plan without first deciding on UltraTech's eligibility under Section 29A of IBC 2016." The letter said the question of revising the bid does not arise until the issue of UltraTech's eligibility is established.
UltraTech's contention is that its letter revising its bid came when voting on the bids were underway, and hence it should have been considered. Almost all the bankers had voted in favour of Dalmia Cement. Exim Bank voted with a protest as it wanted to go with the UltraTech offer which took care of the bank's unsecured loan of Rs 620 crore, according to bankers.
"We did not expect Dalmia to revise its bid. Even in the CoC held on May 18, the company was sticking to the point of eligibility. But UltraTech has an elaborate repayment plan with a Rs 350 crore fund infusion for the plant," said a banker.
Dalmia said that NCLAT in its order has said that CoC must first examine the eligibility of UltraTech under Section 29 A where UltraTech is considered to be a related party. The court had asked the CoC to first resolve the eligibility issue before deciding on the winner.
The letter said that by asking Rajputana Properties to revise its bid it seemed as if bankers have taken the UltraTech bid to be compliant with the provisions of IBC. "This seems to be in violation to the provisions of the Code as well as the NCLAT Order," Dalmia's letter said.
The dispute arose as the letter of comfort was handed out by UltraTech after it lost out to rival, the Dalmia-led consortium, in a bidding process under IBC 2016. UltraTech had put in a bid of Rs 6,200 crore, which it improved by Rs 1,066 crore after the bidder was selected. Dame continues to contest the decision, saying it wasn't a transparent process. State Bank of India's Hong Kong branch has already approached the NCLT to be paid off its dues of Rs 40 crore for corporate guarantees they had extended to Binani and also Exim Bank for repayment of an unsecured loan of Rs 620 crore.
Just as the objections on the eligibility of UltraTech's move to sweeten its offer after the bidding process is over is submitted to the Resolution professional. However the company alleged that the resolution plan of UltraTech is not shared with the Resolution professional or with the Dalmias.
"In the absence of the complete resolution plan of UltraTech, the resoluton professional cannot examine the scheme and the revival that form the basis of UltraTech's offer and cannot take a decision on UltraTech's resolution plan," the letter said. Dalmia argued in the letter that a resolution plan is much more than mere payment figures and is expected to consider a scheme for "insolvency resolution", based on several assumptions and the figures should not assessed in isolation.
NO SOLUTION
- UltraTech's contention is that its letter revising its bid came when voting on the bids were underway, and hence it should have been considered
- NCLAT has ruled CoC must first examine the eligibility of UltraTech under Section 29 A where UltraTech is considered to be a related party
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