Binani Cement lenders put ball in NCLT court

A day after UltraTech Cement upped the offer to take over Binani Cement, lenders said they are awaiting the National Company Law Tribunal (NCLT) to take a call on the deal.

Bankers are following the due process under the Insolvency and Bankruptcy Code (IBC) 2016, and waiting for NCLT Kolkata to take a call on the bid.

Bankers said that UltraTech has not approached it with any bid post the company's announcement on Monday. UltraTech is also expected to submit its revised bid of Rs 7,022 crore to the NCLT when the court takes up the bid from lenders.

A source close to the development said, "The committee of creditors has selected the highest bid and a resolution plan and submitted to the resolution professional (RP). The RP has now submitted it to the NCLT, which will take a call on March 22."

Another banker said UltraTech's announcement on Monday is outside the NCLT process so they will have to wait for the court to decide.

The NCLT will have to decide if the second-highest bidder has the right to revise its bid, and also whether Dalmia consortium should be given the right to revise its bid.

The challenge for the fledgling IBC, which got implemented 15 months back, is to take a fair view on this case so that the whole IBC process is not undermined.

UltraTech controlled by billionaire Kumar Mangalam Birla, in a surprise move, announced taking over Binani Cement with an offer of Rs 7,266 crore. This comes after it lost out to rival, the Dalmia led consortium in a bidding process under the 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. The company contested that it wasn't a transparent process.

Sameer Kaji, senior advisor for Binani Industries, said in a press conference on Monday, "The company has liabilities to the tune of Rs 5,320 crore and also a corporate guarantee of Rs 620 crore from Exim Bank and another Rs 240 crore of foreign loans. All this would be taken care of by the UltraTech offer."

While UltraTech is hoping that its revised bid that takes care of all the company's liabilities are accepted by the court and the lenders, Dalmia consortium is waiting to see what stand the court takes on the deal.

The move comes close on heels of its rival Dalmia Cement announcing last week that its Rs 6,350 crore bid to buy Binani Cements has been accepted by the lenders. Besides offering Rs 6,350 crore, Dalmia had also offered a 20% equity in Binani to the lenders. Lenders were planning to monetise the stake if the bid got accepted by NCLT.

Binani Industries said that the Board was not invited to attend the creditors' meeting, and this has forced it to move the NCLAT against the Resolution Professional (RP), alleging that its order was not followed while declaring the successful resolution plan for the struggling cement maker.

In a petition filed with the NCLAT, the company has asked to declare the meeting of the Committee of Creditors (CoC) of Binani Cement held on March 14, 2018, as "null and void" as it was in gross violation and wilful disobedience of the order dated March 3, 2018 and indulging in criminal obstruction of administration of justice, Binani said in its petition.

Binani Industries, which holds 98% Binani Cement, has also raised questions over the appointment of Vijaykumar V Iyer as Interim Resolution Professional in the application filed before the Kolkata bench of NCLT.

VEXED ISSUE

• The NCLT will have to decide if the second-highest bidder has the right to revise its bid, and also whether Dalmia consortium should also be given the right to revise its bid
   
• The challenge for the fledgling IBC, which got implemented 15 months back, is to take a fair view on this case so that the whole IBC process is not undermined