Binani Industries offers to bail out Binani Cement

The battle for Binani Cement Ltd (BCL) is getting fierce with Braj Binani-promoted Binani Industries Ltd (BIL) now planning to clear the dues of Binani Cement by seeking a refinance loan from banks and other financial institutions. With this move Binani industries plans to clear the dues and get back the possession of its cement subsidiary, a coveted asset that both Dalmia Cement and Ultratech is fighting to acquire.

According to sources “Binani cement which is 98.4% owned by Binani Industries is planning to arrange for Rs 8,000 crore to settle the dues of both the financial creditors and operational creditors, including Rs 500 crore of working capital loans for running the company.”

On Wednesday, Binani Industries appealed to the National Company Law Tribunal (NCLAT) to allow it as a shareholder for clearing the dues of the creditors and allow it to do so in a fortnight time. “This would mean exiting the corporate insolvency resolution process (CIRP) as per the NCLAT direction,” said a source who is aware of the company’s plans.

While submitting the new proposal to the NCLAT Delhi, the counsel appearing for Binani industries said settling of the creditors’ claims will bring the company out of the insolvency proceedings. NCLAT has now asked the CoC and also the resolution professional (RP) to file their reply in five days. It has also asked Rajputana properties, a subsidiary of Dalmia Bharat group, whose bid was approved by CoC to file a intervention petition on the matter.

Meanwhile, Rajputana Properties, which was selected as the highest bidder for Binani Cement, is expected to oppose the move under section 29 A of the Insolvency and Bankruptcy Code 2016 (IBC), saying BIL is an insolvent and a petition for winding up has been filed against the company under Section 29A(c) stating that BIL is a promoter of BCL whose accounts have been non-performing. The company in a letter also said it is disqualified under section 29A (H), as BIL has issued an enforceable guarantee to the creditors of BCL.

NCLAT has also asked the RP to submit his view on questions pertaining to the bidders' eligibility in conformity with the IBC to the CoC, that too in a sealed cover, without consulting any of the parties interested in taking over the bankrupt cement maker.

The dispute in the bidding process arose after a letter of comfort was handed out by UltraTech when it lost out to rival, the Dalmia-led consortium, in a bidding process under the IBC 2016. UltraTech had put in a bid of Rs 6,200 crore, which it increased to Rs 7,999 crore after the bids were declared, saying that the bidding was not a transparent process. The move came close after rival Dalmia Cement said that its bid of Rs 6,350 crore was accepted by the lenders.

Besides offering Rs 6,350 crore, Dalmia had also offered a 20% equity in Binani to the lenders. Matters got further complicated with State Bank of India's Hong Kong branch approaching the NCLT to be paid off its dues of Rs 40 crore for corporate guarantees it had extended to Binani and also Exim Bank for repayment of an unsecured loan of Rs 620 crore.

BAILOUT ATTEMPT

• The company is seeking a refinance loan of Rs 8,000 crore from banks and other financial institutions
   
• Dalmia Bharat group's subsidiary Rajputana Properties is expected to oppose the move