Edelweiss Asset Reconstruction Company (ARC) on Friday urged the Kolkata bench of the National Company Law Tribunal (NCLT) to reject around Rs 2,000-crore claims raised by IDBI Bank, Bank of Baroda (BoB) and State Bank of India (SBI) in the insolvency case against Binani Cement.
Edelweiss Asset Reconstruction Company (ARC) on Friday urged the Kolkata bench of the National Company Law Tribunal (NCLT) to reject around Rs 2,000-crore claims raised by IDBI Bank, Bank of Baroda (BoB) and State Bank of India (SBI) in the insolvency case against Binani Cement. It alleged that the resolution professional (RP) has admitted claims from those lenders on the basis of a corporate guarantee, which was either not invoked or was invoked after the date. After hearing counsels for Edelweiss ARC and resolution professional Vijaykumar V Iyer, a division bench of the tribunal, comprising justices VP Singh and KR Jinan, directed Iyer to decide on the objections raised by the ARC within two weeks. The next date of hearing is scheduled for December 12. During the hearing, Edelweiss ARC’s counsel Sumant Batra contended before the division bench that the settled position of law is that as long as the corporate guarantee is not being invoked, it does not become payable. Notably, the Kolkata bench of the NCLT had in July admitted an insolvency petition against Binani Cement, a subsidiary of Binani Industries. BoB referred the company to the bankruptcy court after it had failed to repay a sum of Rs 97 crore. BoB had appointed Iyer of Deloitte India as the interim resolution professional (IRP) to oversee the insolvency process. The company owes a consortium of lenders close to Rs 3,042.93 crore. Edelweiss ARC, which has bought a chunk of the debt from banks, is now the leader of the consortium.
“They (IDBI, BoB and SBI) are already exercising over 26% voting rights as part of the committee of creditors (CoC). Over 25% voting rights means they can block a resolution and therefore it is very fundamental that this matter has a direct bearing,” Batra told the bench on Friday. The counsel appearing for the RP said, “We have not decided on the issue and that is why we filed an application for the NCLT’s direction on this matter.” Binani Cement reported a net loss of Rs 289 crore for 2015-16 on Rs 1,524 crore in revenues, primarily owing to an interest outgo of Rs 368 crore. The company has a manufacturing capacity of 11.25 million tonne (MT) per annum with integrated plants in India and China, and grinding units in Dubai, according to its website.