Race for Binani Cement: Binani Industries moves Supreme Court

While demanding an end to the resolution process, which was initiated by the Bank of Baroda last year, BIL said that it has entered into a business arrangement with UltraTech Cement to mobilise sufficient funds to pay of all the claims and restore the cement maker back to its full financial health. “The offer is in the public interest and takes care of 100% dues of all creditors as against the loss of over Rs 1,100 crore sought to be caused by Rajputana Properties (RPL), the wholly-owned subsidiary of Dalmia Cement (Bharat), by grabbing the company at a discount,” BIL said in its appeal to the top court.

BIL approached the apex court on Monday after an indication from lenders that they would consider its proposal only after necessary permissions are obtained for proceeding with any settlement.

“Binani Industries’ revised offer is really good. So, if Supreme Court has no issue, lenders have no issue. We have generally accepted the revised plan in present form. On Saturday, lenders took this view in the meet,” a lender told FE on condition of anonymity.

BIL has challenged the jurisdiction of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) to consider any resolution plan by a third party when the original promoter was offering to pay full dues within two weeks. It is the “right” of the debtor company and its shareholders to demand an end to bankruptcy process, the company said.

The committee of creditors (CoC) of BCL had approved the offer of `6,350 crore by Dalmia Bharat Cement for the debt-ridden firm on March 14 under the Insolvency and Bankruptcy Code. However, BIL and UltraTech challenged this move on grounds of irregularities in the resolution process, before proposing an out-of-court settlement.

In a related development on Monday, a division bench of the NCLT, comprising justices Jinan KR and Madan Balachandra Gosavi, heard the Binani Cement insolvency case.

In his submission before the tribunal, Binani Industries’ counsel Ratnanko Banerjee said, “We have filed an application before the Supreme Court for setting aside the order passed by the NCLAT on April 5. The apex court is scheduled to hear the case on April 13.” Banerjee said that BIL is also praying before the Supreme Court for the termination of the insolvency proceedings against its subsidiary Binani Cement — a necessary condition under the Insolvency and Bankruptcy Code for its deal with UltraTech to go through. “We are offering Rs 1,100 crore more to the creditors than Dalmia Bharat… We are willing to settle with everyone with 120% payment (as per the revised offer),” Banerjee said in his submission. A BIL source confirmed that the company has revised its offer to around Rs 7,600 crore.

After hearing of the submission, the two-member bench listed the matter for hearing on April 16.

The Kolkata bench of the NCLT had placed the responsibility of considering an out-of-tribunal settlement on the lenders of Binani Cement and had asked them to arrive at a decision by April 9.

Apprehending a move by BIL to challenge the earlier decision, in a letter to the CoC on April 7, RPL (Dalmia Bharat’s wholly-owned subsidiary) said, “CoC has no jurisdiction, power, authority or right under the Code (IBC) to entertain and consider such a settlement proposal (out-of-tribunal) from BIL. Entertaining such a proposal by the CoC would be a material illegality and direct infraction of the statutory process prescribed under the provisions of the code.”