Lenders to Binani Cement seek time to weigh UltraTech offer
Lenders to Binani Cement Ltd have asked for time till April 2 to consider UltraTech Cement Ltd’s bid for the company outside the bankruptcy process.
On Tuesday, the Kolkata bench of the National Company Law Tribunal (NCLT) asked the lenders if they were willing to consider UltraTech’s proposal to buy a 98.43% stake in Binani Cement from its parent Binani Industries Ltd. Binani Cement is currently undergoing resolution under the insolvency and bankruptcy code (IBC).
The counsel for the lenders described the UltraTech deal as “excellent” and asked the NCLT for time till April 2 to decide whether to consider it. The tribunal will now hear the matter on April 2.
Though he described the proposal as “excellent” and acknowledged that the deal could result in all creditors being repaid, the counsel for the lenders, Pratap Chatterjee, asked
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the Kolkata bench of the NCLT if there was any provision under IBC for an out-of-court settlement. Only the Supreme Court has the authority to terminate resolution proceedings, he said.
Chatterjee sought time saying the matter had to be discussed among 25 lenders.
The Braj Binani group had earlier prayed for suspension of the proceedings so that it could sell its stake in Binani Cement for ₹7,266 crore and repay creditors. It has committed to pay off Binani Cement’s dues within two weeks if allowed to sell stake to UltraTech.
Dalmia Bharat Ltd, which had earlier been declared as the highest bidder for the assets of Binani Cement, has argued that allowing an out-of-court settlement at this stage will undermine the sanctity of the insolvency resolution process under IBC.
“If the process (of insolvency resolution) is seen as unclear or arbitrary...bona fide applicants will decline to spend time and money to submit bids,” Dalmia Bharat has said in a petition.