With the promoters of Binani Cement approaching the National Company Law Appellate Tribunal (NCLAT), the bankruptcy resolution process is turning out to be a trial by fire for lenders looking to recoup funds extended to troubled companies.
Just when the bankers thought that they were getting all their money back from the Binani Cement, the promoters have approached NCLAT in Kolkata to appeal against the decision of the committee of creditors (CoC). Bankers told DNA Money that the verdict of the Tribunal would decide the fate of other big companies that are likely to seek legal recourse once the bids are announced.
The company is asking the court to declare the creditors' meeting null and void as no Board member from the company was party to the meeting. The creditors' meeting is expected to declare the new promoter.
The Dalmia Bharat consortium, which was declared the highest bidder, has offered to repay all secured lenders and the unsecured lender IDBI Bank. The Rs 6,700 crore offer also includes a capital infusion of Rs 400 crore. But a day after Dalmia was declared the highest bidder, Ultratech upped its bid and also filed a case in the NCLT Kolkata, objecting to the manner in which the highest bidder was selected. The company owes bankers about Rs 6,500 crore.
With Ultratech raising its bid by close to Rs 700 crore, the promoters, Binani Industries, want to get the best price from the cement sale deal, forcing them to approach the NCLAT.
According to Binani Industries, the NCLAT has directed that if any meeting of the committee of creditors is held, resolution professional would intimate the suspended Board of Directors of Binani Cement to attend the meeting. The company had got an order dated March 3, 2018, passed by NCLAT.
The company now alleges that the Board was not invited to attend the creditors' meeting and this has forced Binani Industries to move the NCLAT against the Resolution Professional (RP) of Binani Cement, alleging that its order was not followed while declaring the successful resolution plan for the struggling cement maker.
Bankers said, "The whole process of selection was transparent with detailed marking for each criteria. Obviously, the consortium led by Dalmia won the bid, and the other bidder, Ultratech was rejected due to some cases with the Competition Commission of India which were concluded. In Dalmia's case, the investigations were on but there was no conclusion in any case."
Binani Industries has also asked the NCLAT to declare the meeting of the Committee of Creditors (CoC) of Binani Cement held on March 14, 2018, as "null and void" as it is in gross violation and wilful disobedience of the order dated March 3, 2018 was indulging in criminal obstruction of administration of justice, Binani said in its petition.
Binani Industries, which holds 98% Binani Cement, has also raised questions over the appointment of Vijaykumar V Iyer as Interim Resolution Professional in the application filed before the Kolkata bench of NCLT.
NOTHING CONCRETE
- Binani promoters are asking the court to declare the creditors' meeting null and void as no Board member was party to the meeting
- With Ultratech raising its bid by close to Rs 700 crore, the promoters want to get the best price from the cement sale deal
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