Binani Cement insolvency: NCLT asks CoC to consider UltraTech's revised offer; Dalmia 'surprised' by order

Kolkata/New Delhi: The National Company Law Tribunal (NCLT) on Wednesday asked the Committee of Creditors (CoC) of debt-ridden Binani Cement to consider Aditya Birla group firm UltraTech’s revised offer while setting 24 June as deadline for completion of the insolvency resolution process.

The NCLT bench also asked the CoC to reconsider resolution plan of Rajputana Properties Pvt Ltd (RRPL), if the Dalmia Bharat Group firm, was willing to raise its offer more than UltraTech’s bid.

“It is made clear that of both resolution applicants if willing to participate in the bidding process, the CoC is expected to allow both resolution applicants in the bidding process and which is best for revival of corporate debtor (Binani Cement) is to be decided by the CoC,” it said. In a relief to UltraTech, which had placed a revised offer which more than Rs 1,020 crore higher than the winning bid of Dalmia Bharat Group, the NCLT Kolkata bench said “we may not blind in a case of this nature” while “taking judicial notice of denial of a better revival of the corporate debtor on flimsy grounds”. The bench declined to approve RRPL’s earlier bid and also extended the Corporate Insolvency Resolution Period (CIRP) and asked RP to complete the entire process on or before 24 June, 2018. “Approval of the plan of RPPL does not satisfy larger claim of operational creditors and not satisfy some of the unsecured financial creditors claim,” said a two-member NCLT bench comprising Madan V Gosavi and Jinan K R. It further said that the “revised offer of UltraTech, if approved by the CoC it would satisfy the claims of all stakeholders”. [caption id=“attachment_1348957” align=“alignleft” width=“380”]  UltraTech
Representational image. Reuters[/caption] “For the said reason we are not bound to approve a resolution plan when we are satisfied upon relevant material regarding availability of a better resolution if RP is directed to have reconsideration of both plans under dispute,” the tribunal said in its over 65-page long order. “Interests of justice no doubt demand reconsideration of the resolution plans,” said NCLT adding, “We are inclined to allow the applications.” The bench also extended the Corporate Insolvency Resolution Process (CIRP) period of Binani Cement, which expired on April 21, 2018 by completing 270 days. “Accordingly, we exclude the period from March 8, 2018 till today and therefore the CIRP should be concluded on or before June 24, 2018,” the order said. “The RP is directed to accept the revised offer quoting the (higher) bid amount Rs 1,021 crore from UltraTech within 3 days from the dare of this order,” the tribunal said it to direct the matter on June 4 for filing the progress report. Reacting to the order, a Dalmia Bharat spokesperson said “surprised” by the order passed by the tribunal and would take the appropriate steps required in this. “We are surprised by the order passed by the NCLT today. The RP and CoC followed the due process of law in approving the plan of RPPL in which no flaw has been found,” the company said. The resolution applicant outside the resolution process cannot become a basis of setting aside the decision of the CoC, it added. “We have strong conviction that we have followed the law as per the due process and believe that we will eventually succeed. We will take all the appropriate steps required,” said Dalmia Bharat. NCLT order came over several applications filed before it over sale of Binani Cement. UltraTech Cement’s allegations that the process for choosing the top bidder was not transparent and that RP had not followed established best practices. Dalmia Bharat was declared the top bidder. UltraTech then moved the NCLT and also wrote to Binani Cement’s RP, offering to increase its bid price. But when it was not accepted, UltraTech struck a deal with Binani Industries to buy its 98.43 per cent stake in the cement unit, provided the insolvency case was terminated. Binani Industries then approached NCLT asking that the case be terminated.