Binani Cement case still hangs in balance
9th April 2018
The future of Braj Binani group cement firm Binani Cement is still uncertain. One day after lenders refused to vote on a proposal from UltraTech to buy Binani Cement outside the bankruptcy proceedings, Dalmia Cement was seen in an advantageous position on Thursday. The National Company Law Appellate Tribunal (NCLAT) has told NCLT (Kolkata) on Thursday that the hearing slotted for April 9 should not be influenced by its observation of March 27 and subsequent observation of the appellate body on April 3.
Both the observations had brightened the possibility of an out-of-court takeover by UltraTech Cement. Dalmia Cement Bharat on Thursday moved to NCLAT against the observation of NCLT earlier. This is for the first time Dalmia Group moved any petition on NCLT or the appellate tribunal.
The group CEO of Dalmia Cement, Mahendra Singhi, told TOI that as per its counsel, NCLAT has asked NCLT, Kolkata bench, to go ahead with the resolution process as per Section 31 of the IBC, 2016. “It indirectly means that no other proposal can be considered out of the IBC,” he added.
However, legal experts feel that it is more of a ‘deuce’, after ‘advantage UltraTech’ a few days back. But Singhi was confident that everything would happen within the purview of IBC. “Such judgment highlights that IBC Law should be respected and it will generate confidence on all global investors and business community,” he added. There is a speculation that Binani Industries may now move to Supreme Court and would seek an out-of-court settlement.
The National Company Law Tribunal (NCLT) had suggested in its written order on March 27 that in the larger interest of all the stakeholders, possibility of having a harmonious settlement is to be considered. “Talk of settlement, if any, is at the liberty of the CoC (Committee of Creditors),” the order had said.
According to sources, the final offer of Dalmia Cement which was voted and approved by CoC is over Rs 6,700 crore — substantially higher than what was conceived as its offer of around Rs 6,350 crore. The offer was subsequently filed by Dalmia Cement’s resolution professional (RP) to NCLT. The revised offer of UltraTech was of Rs 7,266 crore.
Following the announcement of declaring Dalmia Bharat as the top bidder on February 27, UltraTech, one of the unsuccessful bidders, raised its offer substantially. Eventually, on March 19, it concluded a deal with Binani Industries for sale of 98.43% stake in the cement maker for Rs 7,266 crore. Even without rejecting UltraTech’s revised bid, Binani Cement’s creditors approved a resolution plan with Dalmia Bharat as the highest bidder.
Amid opposition from the Braj Binani group and UltraTech, the plan was filed with the tribunal for its approval earlier this month. Binani Cement has a capacity of 6.25 million tonne output per year.