Bi­nani lenders cold to Ul­traTech’s new of­fer

Firm will­ing to pay ~79.6 bn, ~7 bn more than ear­lier of­fer, to buy Bi­nani Ce­ment

Business Standard - - FRONT PAGE - AVISHEK RAK­SHIT

Ul­traTech Ce­ment is now will­ing to pay ~79.60 bil­lion, which is ~7 bil­lion more than its ear­lier of­fer, to take over Bi­nani Ce­ment, a bankrupt firm. How­ever, the re­vised of­fer has failed to im­press many of the lenders to Bi­nani Ce­ment.

Sources close to Ul­traTech Ce­ment said the mat­ter re­lat­ing to the hiked of­fer had been com­mu­ni­cated to the res­o­lu­tion pro­fes­sional, Vi­jay Kumar Iyer, and the Com­mit­tee of Cred­i­tors (CoC). The CoC has ac­ceded to the Dalmia Bharat-led con­sor­tium’s (Ul­traTech Ce­ment's ri­val) plan and is­sued a let­ter of in­tent, based on which it has re­ceived part of the pay­ment in accordance with the ap­proved plan.

A source said, “It now needs to be seen if the CoC, as well as the Na­tional Com­pany Law Tri­bunal (NCLT), takes cog­nizance of the new of­fer, which is ~11 bil­lion higher than the of­fer of the win­ning bid­der.”

Ul­traTech Ce­ment, an Aditya Birla Group com­pany, filed an af­fi­davit with the Kolkata Bench of the NCLT on April 16. The tri­bunal will re­sume hear­ing the case on April 17.

“The mat­ter went to the Supreme Court and is back in the NCLT. We are not keen to have any more meet­ings to con­sider fresh or re­newed of­fers un­less or­dered to do so. Bid­ders are at lib­erty to in­crease of­fers but we will fol­low what the NCLT and the ju­di­cial au­thor­i­ties de­cide,” a key lender to Bi­nani Ce­ment told Busi­ness Stan­dard.

The lender said the cred­i­tors had taken note of the Supreme Court pro­ceed­ings on April 13 and con­cluded that the two-judge Bench wasn’t keen on al­low­ing an out-of-court set­tle­ment or didn’t feel like in­ter­ven­ing in the mat­ter.

Ear­lier the NCLT, based on a pe­ti­tion moved by the pro­mot­ers of Bi­nani Ce­ment, had sug­gested an out-of-court set­tle­ment be­tween the pro­mot­ers and the lenders. Ul­traTech Ce­ment is fi­nanc­ing Bi­nani Ce­ment in re­pay­ing the lenders. In lieu of this, it was de­cided that Ul­traTech Ce­ment will take over 98 per cent in the trou­bled firm.

“We asked the pro­mot­ers of Bi­nani Ce­ment to ob­tain the Supreme Court’s ap­proval but they with­drew their pe­ti­tion and the high­est court was un­able to pass a judg­ment. On the other hand, we have con­sid­ered Bi­nani Ce­ment’s pro­posal based on the sug­ges­tions of the NCLT. Now it is up to the ju­di­cial au­thor­i­ties to take a call,” a sec­ond lender told Busi­ness Stan­dard.

The lenders had first turned down

the Ul­traTech Ce­ment-backed pro­posal but re­tracted and said the of­fer was “su­pe­rior and ex­cel­lent” com­pared to what they had ap­proved.

Mean­while, Dalmia Bharat has writ­ten to the Cen­tral Vig­i­lance Com­mis­sion and the Re­serve Bank of In­dia, ask­ing for a probe into what it calls a “flout­ing of laws, which has alarmed some of the lenders and irked some of them”.

Sources in Bi­nani Ce­ment, how­ever, said that the two-mem­ber panel of judges in the Kolkata Bench of the NCLT had re­served the or­der af­ter hear­ing the case and the out-of-court set­tle­ment route still re­mained open for the de­fault­ing ce­ment maker.

Ear­lier, af­ter los­ing out to Dalmia

Bharat at the end of the bid­ding process, Ul­traTech Ce­ment had upped its bid to ~72.66 bil­lion, hop­ing to out­bid Dalmia Bharat’s of­fer.

How­ever, af­ter the re­vised of­fer was al­legedly re­jected in the vot­ing process on March 14, it con­cluded an agree­ment di­rectly with Bi­nani In­dus­tries to take over around 98 per cent of the stakes, of­fer­ing a sim­i­lar amount — the rider be­ing this ter­mi­na­tion of the IBC pro­ceed­ings. Af­ter the lenders’ meet­ing, Ul­traTech Ce­ment in­creased this out-of-court set­tle­ment of­fer to fi­nan­cially back Bi­nani Ce­ment to over ~76 bil­lion and fi­nally, with not even a week left be­fore the stip­u­lated 270 days ex­pire under the IBC rules, it again in­creased its of­fer to ~79.6 bil­lion.

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