Move seen strengthening UltraTech Cement bid in acquiring company.
A two-member bench of the National Company Law Appellate Tribunal (NCLAT) on Tuesday asked the parties involved in the resolution process of Binani Cement to consider an amicable settlement. The bench was hearing an application filed by Binani Industries, promoter of the debt-laden cement maker, against the resolution professional (RP), Vijaykumar V Iyer. This direction by the appellate body should further strengthen the prospects of the Aditya Birla-led UltraTech Cement in the acquisition of the beleaguered cement maker.
In his submission before the appellate tribunal, Binani Industries counsel Ratnanko Banerjee said, “We have moved an application before the NCLT (National Company Law Tribunal), Kolkata, for an out-of-tribunal settlement for making 100% payment to creditors. We are willing to settle with everyone with 100% payment.”
After hearing the submissions, the NCLAT bench allowed the parties in dispute over selling of Binani Cement to amicably settle the matter. “We give liberty to parties to reach settlement and approach appropriate forum for approval of the settlement,” the bench added. The matter is scheduled for hearing on April 19. The RP was not available for a comment.
Binani Industries had moved the NCLAT in March against the resolution professional (RP), alleging that its order was not followed while declaring the successful resolution plan for the insolvent cement maker.
In its application, Binani Industries had also asked the appellate tribunal to declare the meeting of the committee of creditors (CoC) of Binani Cements held on March 14 as “null and void”.
On Monday, the Kolkata bench of the NCLT had asked the lenders of Binani Cement to consider an out-of-tribunal settlement within the deadline of April 9. The CoC had sought more time to resolve the issue as it had received the NCLT’s order dated March 27 late, due to several holidays.
The NCLT’s willingness to permit an out-of-court settlement and allow the lenders to explore fresh solutions — after Dalmia Bharat was declared the highest bidder — is of significance given the Insolvency and Bankruptcy Code (IBC) is in its early days.
When contacted, Mahendra Singhi, group CEO, Dalmia Bharat Cement, said, “We can comment on NCLAT matter when the judgment comes. But bankers know that they are having a contract with us. That is why we feel that no other settlement can be done as per the IBC norms. We will always like to work under the framework of the law.”
Binani Industries had on March 27 offered to pay off all the dues of the financial and operational creditors of Binani Cement within two weeks. This followed a proposal by UltraTech Cement which agreed to buy out the majority stake of 98.47% in the cement manufacturer for Rs 7,266 crore. The Kolkata bench of the NCLT had said: “Talk of settlement, if any, is at the liberty of the CoC. The time is granted.” UltraTech had offered a letter of comfort to Binani Industries and said that its offer to buy Binani Cement is subject to the termination of the insolvency proceedings in the NCLT.
A division bench comprising justices Jinan KR and Madan Balachandra Gosavi said on Monday the case would be heard next on April 9; it refused the creditors any extra time to form an opinion on the matter. Given this, the decision of the CoC to be submitted on April 9 will form a key input for the NCLAT hearing on April 19.
(With inputs from PTI)