Dalmia Cement may not revise its bid for Binani Cement, to continue legal battle

Dalmia Cement will continue its legal battle against UltraTech Cement's revised bid and is unlikely to raise its bid offer for Binani Cement. The Committee of Creditors (CoC) have given Dalmia Cement time till May 23 to revise its bid for Binani Cement. However, Dalmia will once again move the National Company Law Appellate Tribunal (NCLAT) today challenging Ultratech's move to revise its offer despite being voted as the second highest bidder for the cement asset. For Dalmia, the case in the NCLAT will be fought by Gopal Subramanian, former attorney general, while UltraTech's side will be led by Harish Salve and Mukul Rohatgi.

A banker, who is also part of CoC, said, "Dalmia is unlikely to revise its bid. We have asked the company to revise its bid but it is likely to hold on to its contention that it was voted as the highest bidder following the Insolvency and Bankruptcy Code (IBC) process while challenging Ultratech's eligibility. Dalmia has time till 12 noon on May 23 to revise its bid."

Meanwhile, National Company Law Tribunal (NCLT) has already asked the bankers to look into the revised bid of Aditya Birla Group's cement firm if it takes care of the outstanding dues, including the operational creditors and unsecured lenders while giving Dalmia an opportunity to improve its bid.

"UltraTech's revised offer is far superior to Dalmia's offer as it takes care of all the creditors and also includes Rs 350 crore of working capital for operationalising Binani Cement plant, but Dalmia also needs to be given an opportunity to revise its bid," said another banker.

UltraTech's contention is that its letter revising its bid came when voting on the bids were underway and hence it should have been considered. "Almost all the bankers had voted in favour of Dalmia Cement. Exim Bank voted with a protest as it wanted to go with the UltraTech offer which took care of the bank's unsecured loan of Rs 620 crore," said a banker.

The dispute arose as the letter of comfort was handed out by UltraTech after it lost out to rival, the Dalmia-led consortium, in a bidding process under IBC 2016. UltraTech had put in a bid of Rs 6,200 crore, which it improved by Rs 1,066 crore after the bidder was selected. Dalmia continues to contest the decision saying it wasn't a transparent process. State Bank of India's Hong Kong branch has already approached the NCLT to be paid off its dues of Rs 40 crore for corporate guarantees they had extended to Binani and also Exim Bank for repayment of an unsecured loan of Rs 620 crore.

In the first round of bidding, a number of companies, including LafargeHolcim, Heidelberg Cement, India Cement, Orient Cement, Ramco Cement, Shree Cement, UltraTech Cement and Piramal Group, ace stock market investor Rakesh Jhunjhunwala and Ramesh Damani of D'Mart had put in their bids. JSW Cement had emerged as the winner with a bid of $919 million, but that auction was junked due to financial irregularties of Binani Industries.

By February 2018, the next auction was in progress with Dalmia Bharat Cement and UltraTech Cement in the race. Dalmia Bharat, which was in a consortium with Bain Capital's India Resurgent Fund and Piramal Enterprises, emerged as the largest bidder.

FIERCE BATTLE

• NCLAT to hear the Binani plea today challenging the eligibility of Ultratech
   
• Committee of Creditors have given Dalmia Cement time till May 23 to revise its bid for Binani Cement
   
• NCLT has already asked the bankers to look into the revised bid of UltraTech Cement