Stuck to norms on UltraTech bid, say lenders of Binani

Lenders of Binani Cement Ltd on Tuesday told the Kolkata bench of the National Company Law Tribunal (NCLT) that they declined to consider the revised bid of Ultratech Cement Ltd because they were of the view that the sanctity of the process and “certainty of contracts” were more important than higher realization through an unsolicited bid.

If lenders started to consider revised bids of unsuccessful bidders, the process of time-bound insolvency resolution through “secret bids” would be undermined, Pratap Chatterjee, counsel for the company’s committee of creditors, submitted at the tribunal. Creditors followed established guidelines of the Central Vigilance Commission while rejecting UltraTech’s revised bid, he added.

When asked by the bench if by a majority decision, lenders could ignore a higher bid, Chatterjee said they took a stand that the rules of the game couldn’t be changed after the game had started. They decided to stick to the so-called process document, which was agreed upon by the committee of creditors at the beginning of the resolution process. At least 90% of the creditors had agreed when finalising the process document that the committee will negotiate only with the highest bidder, Abhrajit Mitra, counsel for the resolution professional said.

Dalmia Bharat Ltd was declared the top bidder for Binani Cement’s 11 million tonne production capacity, and a resolution plan with its ₹6,700 crore bid has been filed with the Kolkata bench of the NCLT for its approval. After being outbid, UltraTech made a higher bid and circulated it among lenders and the resolution professional by email.

UltraTech also struck a deal with Binani Industries Ltd, the parent of the delinquent cement maker, to acquire its 98.43% stake in the company at ₹7,266 crore. However, the plan did not materialize as it required the insolvency resolution process to be halted, and the Supreme Court declined to do so.

Tanya Thomas in Mumbai contributed to this story)

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