In its 44-page order, the appellate tribunal has noted that the RPPL’s resolution plan discriminated between some of the financial creditors who are equally situated and not balanced the other stakeholder, such as operational creditors.
After a long drawn legal wrangling which saw the matter going back and forth between the National Company Law Tribunal, the appellate tribunal and even the Supreme Court, the National Company Law Appellate Tribunal (NCLAT) on Wednesday finally approved the revised bid of Aditya Birla Group’s UltraTech Cement for the bankrupt Binani Cement. UltraTech has offered to pay `7,960 crore under its plan wherein all the financial as well as the operational creditors will receive their complete dues.
A two-member bench headed by NCLAT chairman Justice SJ Mukhopadhaya while approving UltraTech’s resolution plan said that the plan submitted by rival Dalmia Bharat Group firm Rajputana Properties (RPPL) was discriminatory against some financial creditors.
In its 44-page order, the appellate tribunal has noted that the RPPL’s resolution plan discriminated between some of the financial creditors who are equally situated and not balanced the other stakeholder, such as operational creditors. “Therefore, the adjudicating authority (NCLT Kolkata bench) has rightly held the resolution plan submitted by RPPL to be discriminatory,” it has noted.
It said the committee of creditors (CoC) had erred initially by endorsing RPPL’s plan and rejecting UltraTech’s plan on the ground that it was submitted late. The NCLAT has said that both — RPPL and UltraTech — had submitted their plans on February 12, 2018 and subsequently RPPL had revised its plan on March 7 and UltraTech on March 8, much before the CoC voting date of March 14. However, while the CoC accepted the revised offer of RPPL it did not do so in case of UltraTech.
Wednesday’s order comes after on July 2 the Supreme Court had asked the NCLAT to decide all issues related to Binani Cement’s insolvency case, including the eligibility criteria of UltraTech Cement to file a revised bid. It had also transferred all the cases from the National Company Law Tribunal, Kolkata, to the NCLAT. The apex court had directed the appellate tribunal to decide the case on day-to-day basis and pronounce its judgement as soon as possible.
Rajputana Properties had moved the SC against the revised decision of the committee of creditors for Binani Cements to consider the revised resolution plan submitted by UltraTech Cement.
Rajputana Properties had maintained that UltraTech Cement was ineligible to submit a resolution plan for Binani Cement under section 29A of the Insolvency and Bankruptcy Code (IBC) and therefore its eligibility should be decided first.
On May 4, the NCLAT had in an interim order allowed the resolution professional (RP) and CoC to consider the revised resolution plan submitted by UltraTech, while offering RPPL an opportunity to revise its resolution plan of Rs 6,930 crore, which included infusion of working capital and capex. UltraTech Cement’s revised offer stood at Rs 7,960 crore, against its earlier bid of over Rs 7,200 crore. However, RPPL had not raised its offer of around Rs 6,930 crore.
The CoC on May 29 had voted in absolute majority in favour of the revised resolution plan submitted by UltraTech Cement which has offered to pay Rs 7,960 crore. Under this plan, all the financial as well as the operational creditors will receive their complete dues.
Initially, the committee of creditors had approved the plan presented by RPPL for taking over of Binani Cement. UltraTech had opposed it and moved NCLT alleging that there was lack of transparency on the part of the resolution professional and it did not consider its revised offer which was higher than RPPL’s.