Debt-laden Binani Cement will see bidding war start all over again after the National Company Law Tribunal (NCLT) on Wednesday allowed UltraTech Cement to join the fray and asked the creditors to consider Kumar Mangalam Birla group-owned cement player UltraTech's revised bid.
UltraTech's revised bid needs to be submitted within three days to the resolution professional for consideration of the Committee of Creditors (CoC) and the whole process, which might involve getting fresh bid from Dalmia, has to be completed by June 24, about two months extension from the statutory 270-days deadline for insolvency resolution.
Despite UltraTech's revised unsolicitated bid of Rs 7,960 crore has been higher than Dalmia Bharat's Rs 6,590 crore which was earlier accepted by the Committe of Creditors, there is no surety that the deal will be sealed by the former. This is because NCLT has also provided an opportunity to Dalmia led consortium, Rajputana Properties, to revise its bid.
NCLT's decision to allow outside-the-court settlement supervised through resolution process has been in line with its decision on the Bhushan Power & Steel case where it allowed the UK-based Liberty House to reenter the bidding process despite missing the deadline.
In the Binani Cement case, UltraTech revised its bid much after Dalmia had submitted its bid within the prescribed deadline, which was then accepted as the best offer.
The principal being followed now is maximisation of the bid value which benefits all the stakeholders involved.
But this, expectedly, hasn't pleased Dalmia Bharat which might now explore legal remedy to prevent any rebidding process.
"In our view, any revised offer from an unsuccessful resolution applicant outside the resolution process cannot become a basis of setting aside the decision of the CoC. We have strong conviction that we have followed the law as per the due process and believe that we will eventually succeed. We will take all the appropriate steps required," a spokesperson of Dalmia Bharat said.
The operational creditors who prefer UltraTech's bid are clearly elated by the ruling.
"The path breaking NCLT order serves a clear guideline to the RPs and the COC to look beyond the financial creditors and discharge their fiduciary role of maximizing the recovery for all creditors through their approved resolution plan. The judgment shall bring in a new lease of life not only for 3,000 operating creditors of Binani Cement but also for its 30,000 family members," Rajesh Tibrewal, spokesperson of operational creditors said.
ALL OVER AGAIN
- UltraTech’s revised bid needs to be submitted within three days
- The bidding process has to be completed by June 24
- UltraTech had earlier bid Rs 7,960 crore
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