The move for out-of-the-court settlement unprecedented till date for cases under the IBC
UltraTech and Dalmia Bharat appear to be equally strong contenders in the battle to acquire debt-laden Binani Cement.
One one hand, Kumar Mangalam Birla-promoted UltraTech's hope of lapping up Binani Cement through a deal with its promoters continues to linger. The National Company Law Tribunal (NCLT) on Monday gave financial creditors a week's time to seriously consider out-of-tribunal settlement.
Whereas, Dalmia Bharat believes their highest bid is the only option for creditors who have no choice but to honour their firm offer made under the Insolvency and Bankruptcy Code (IBC).
NCLT Kolkata bench's earlier directive given on March 27 was not considered by the Committee of Creditors (CoC), following which the court directed on Monday them to consider Binani Industries's application for a settlement and respond on April 9.
For Dalmia Bharat, Monday's directive does not change anything.
"The judges on March 27 had said they can't direct the Committee of Creditors, which may consider (out-of-tribunal) proposal at their liberty. The same thing has been told today also. The CoC is fully aware that they are bound by legal contract with us," Mahendra Singhi, chief executive officer, Dalmia Bharat Group told DNA Money on Monday.
The move for out-of-the-court settlement, unprecedented till date for cases under the IBC, involves consideration of Binani Cement parent Binani Industries's pact with unsuccessful bidder UltraTech Cement Ltd to sell its 98.43% shareholding in the cement business to the Aditya Birla Group company for Rs 7,266 crore.
The deal value is higher than the highest bid of Dalmia Bharat at about Rs 6,700 crore.
Since the deal was determined outside the ongoing resolution process in which Dalmia Bharat Ltd-led consortium was selected as winning bidder by the CoC, Binani Industries needs to terminate the resolution process.
For this, Binani Cement will have to repay its lenders and other liabilities, which are in the range of Rs 5,600-6,000 crore as per the company's estimates.
Dalmia has contested the UltraTech-Binani deal as illegal as it was outside the IBC proceedings.
On March 27, the court observed, "In the larger interest of the stakeholders, possibility of having a harmonious settlement is to be considered. Parties are free to consider it out of Tribunal," the tribunal had said but added that the talk of settlement, if any, would be at the liberty of the financial creditors.
The suggestion was supported by operational creditors also who are now represented in the case.
"The operational creditors had pinned their hopes on the CoC meeting (out-of-court settlement) which did not take place. Now that the ball is back in the CoC's court, we hope the issue will soon be resolved, Binani Operational Creditors Forum spokesperson Hitesh Bindal said after the Monday's ruling.
NCLT would now hear the case again on April 9.
SEWING A DEAL
- National Company Law Tribunal (NCLT) on Monday gave financial creditors a week's time to seriously consider out-of-tribunal settlement with UltraTech
- Dalmia Bharat believes their highest bid is the only option for creditors who have no choice but to honour their firm offer made under the IBC
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Binani Cement")
)
NCLT Kolkata bench's earlier directive given on March 27 was not considered by the Committee of Creditors (CoC), following which the court directed on Monday them to consider Binani Industries's application for a settlement and respond on April 9.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}