BINANI LENDERS MAY TAKE CALL ON ULTRATECH’S PLAN TOMORROW
The committee of creditors (CoC) of Binani Cement, which is undergoing insolvency process, is likely to meet on Wednesday to discuss the revised ~79.6-billion offer from UltraTech Cement. According to sources, if UltraTech’s offer is accepted, the lenders will ask the Dalmia Bharat-led consortium – the H1 bidder – to match the proposal.
“In case Dalmia Bharat matches UltraTech’s offer, the matter will again come back to the CoC. If Dalmia Bharat doesn’t raise its bid, it is likely that UltraTech’s proposal will make its way through,” a lead lender to Binani Cement said. However, if Dalmia Bharat raises its bid offer, UltraTech might revise its proposal again.
The National Company Law Tribunal (NCLT) had directed the CoC to consider the Aditya Birla group firm’s proposal, despite it being termed an “unsuccessful bidder”. It had ordered the resolution professional (RP) to submit the revised UltraTech proposal before the CoC and asked them to accommodate any modifications to the proposal, if necessary.
The CoC was to meet on May 5 and then on May 7 but it could not as the RP had sought clarifications from the NCLT on its order. According to sources, the NCLT has replied to the RP and the UltraTech proposal has been sent to the lenders for their consideration.
According to the NCLT’s order, the CoC is bound to give the H1 bidder a chance to match UltraTech’s proposal. The NCLT has also directed the CoC to “bear in mind the objective of the IBC”, which, according to the tribunal, is maximisation of value. Sources in Dalmia Bharat, however, maintain that any amount higher than ~67 billion will be financially unviable. They said Dalmia Bharat might not offer any amount higher than the one accepted by the CoC earlier.
The CoC’s verdict in choosing either UltraTech or Rajputana Properties — the consortium floated by Dalmia Bharat together with Piramal and Bain for the takeover of Binani Cement — will also depend on the decision of the National Companies Law Appellate Tribunal (NCLAT), which is expected on May 22.
Rajputana Properties had moved NCLAT on May 4 to obtain a stay on the NCLT’s order. “We may finally select any one among the two contestants, but it all depends on what NCLAT finally says. If it accepts Dalmia Bharat consortium’s plea, the entire scenario may change,” one of the lenders said. Sources also said Dalmia Bharat is weighing options to move to Supreme Court in case NCLAT’s decision is not in its favour.