Committee of creditors to make next move: Binani Industries offers payment assurances to settle out of NCLT

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Mumbai | Published: April 5, 2018 4:10:33 AM

Binani Industries is understood to have offered the committee of creditors (CoC) of Binani Cement an assurance on swift and complete payment in support of its resolution plan at a meeting on Wednesday.

Binani Industries, NCLT, binani cement, creditorsBinani Industries is understood to have offered the committee of creditors (CoC) of Binani Cement an assurance on swift and complete payment in support of its resolution plan at a meeting on Wednesday.

Binani Industries, the parent of the loss-making Binani Cement, which has been pushing for an out-of-court resolution, is understood to have offered the committee of creditors (CoC) of Binani Cement an assurance on swift and complete payment in support of its resolution plan at a meeting on Wednesday. Binani Industries is believed to have received a bank guarantee from UltraTech Cement for it to make this commitment to the lenders, sources said. A Binani Cement lawyer, on condition of anonymity, said, “The meeting is still continuing. Before the CoC today, Binani Industries is going to make the same presentation that it had made before the NCLAT (National Company Law Appellate Tribunal) on April 3 and the NCLT (National Company Law Tribunal) on April 2, that they are willing to make the entire payment in 10 days. If the tribunal wants, Binani can secure the amount in the tribunal.” On whether Binani Industries will offer a bank guarantee to the lenders, she said, “We have not given any bank guarantee today. First the CoC has to decide on the out-of-tribunal settlement, only then can we offer the bank guarantee.” FE learnt from banking sources that the lenders had sought part payment in cash and assurance of the rest through a bank guarantee to consider an out-of-tribunal arrangement.

However, the banker claimed that the lenders shall make their submissions before the tribunal and leave the final verdict to it. In a related development, Binani Industries on Tuesday notified stock exchanges that it has sought shareholder approval to sell its 98.43% stake in Binani Cement. On March 19, Binani Industries said its board decided that the company should apply to the NCLT to terminate the insolvency proceedings against Binani Cement. The company had concluded an in-principle commercial understanding with Aditya Birla-led UltraTech Cement to sell its entire stake in Binani Cement. This followed a by proposal from UltraTech Cement, where it agreed to buy out the majority stake of 98.43% in the cement manufacturer for Rs 7,266 crore. 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. The Kolkata bench of the NCLT had said that the decision to go ahead with an out-of-tribunal settlement would lie with the CoC. It had asked the lenders of Binani Cement to consider an out-of-tribunal settlement within the deadline of April 9. On March 16, Dalmia Bharat had said the the resolution plan submitted by Dalmia Bharat-controlled Rajputana Properties was approved by the CoC.

“The CoC of Binani Cement has recommended the resolution plan to the NCLT for its requisite approval,” Dalmia Bharat said in a statement, adding that the resolution plan has received almost 100% approval of the CoC members. The creditors to Binani Cement include State Bank of India, IDBI Bank, Canara Bank, Bank of Baroda, Bank of India, Edelweiss Asset Reconstruction Company and others. As per details on Binani Cement’s website, financial creditors of the company had claimed Rs 6,470.26 crore, while the NCLT had admitted claims worth Rs 6,469.36 crore. On Tuesday, a two-member bench of the NCLAT 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 against the resolution professional (RP), Vijaykumar V Iyer. This direction by the appellate body should further strengthen the prospects of UltraTech Cement in the acquisition of the beleaguered cement maker. 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 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 CoC of Binani Cements held on March 14 as “null and void”.

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