It is Ultratech vs Dalmia again for Binani Cement

KOLKATA: The Kolkata bench of the bankruptcy court on Wednesday ruled that the lenders of debt-ridden Binani Cement Ltd should consider the revised offer of Ultratech Cement Ltd even as it allowed Dalmia Bharat Ltd, chosen by lenders to take over the indebted cement-maker, to submit new bids, effectively restarting a contest between the two suitors.

After being outbid by Dalmia Bharat, Ultratech made a binding offer to pay ₹7,960 crore for the assets of Binani Cement, compared with Dalmia Bharat’s offer of ₹6,932.46 crore. However, Binani Cement’s lenders declined to consider Ultratech’s higher offer because it came after Dalmia Bharat was declared the highest bidder.

The lenders had decided before bids were received that they would negotiate only with the highest bidder, their legal counsel told the tribunal. Though Ultratech offered to pay over ₹1,000 crore more, they were constrained from considering it by rules they had themselves set.

Appearing for Ultratech, lawyer Mukul Rohatgi told the National Company Law Tribunal (NCLT) that Ultratech was ready to raise its bid by ₹500 crore more if Dalmia Bharat matched the current offer.

“It is made clear that if both (companies) are willing to participate in the bidding process, the committee of creditors is expected to allow both in the bidding process,” the tribunal said in its order.

With this verdict, the committee of creditors now has the legal sanction to consider Ultratech’s bid, said Ratnanko Banerji, senior counsel who represented Binani Industries Ltd, the parent of the beleaguered cementmaker.

In the same order, the bench has extended the time for finalizing a resolution plan for Binani Cement till June 24. It will review progress on June 4.

“We are surprised by the order passed by the NCLT today,” Dalmia Bharat said in a statement. The insolvency resolution professional, or the administrator, and the committee of creditors had followed “the due process of law” in selecting the Dalmia Bharat-led consortium as the highest bidder, it said, adding that no flaw was found in the resolution filed with the tribunal for its approval.

“In our view, any revised offer from an unsuccessful resolution applicant outside the resolution process cannot become a basis for setting aside the decision of the committee of creditors. We have strong conviction that we have followed the law as per due process and believe that we will eventually succeed. We will take all the appropriate steps required,” Dalmia Bharat said in the statement.

Though Dalmia Bharat did not clarify if it will approach the appellate tribunal, lawyers in Kolkata said it will.

The biggest gainers from Wednesday’s order are the operational creditors of Binani Cement, who have been opposing Dalmia Bharat’s bid for the company because of the deep haircut that it had proposed.

“The decision (by the tribunal) is a landmark judgement in the right direction, taking into consideration the interest of all stakeholders,” said Rajesh Tibrewal, a spokesperson for the company’s operational creditors, or vendors.