Binani Cement bankruptcy case: SC refuses to allow out-of-court settlement

In a setback for Ultratech, the Supreme Court on Friday refused to allow out-of-court settlement for Binani Cement bankruptcy case. 

UltraTech Cement had informed the stock exchanges that it had obtained the Competition Commission of India's (CCI) approval for its bid for the under-debt company and the company claimed the CCI clearance validates its contention that "they were wrongly and unjustifiably rated H2 instead of H1". Rejecting this, Dalmia Cement (Bharat) Limited's Group CEO Mahendra Singhi had claimed: "The reasons cited by the unsuccessful bidder for its failed bid, in stock exchange filings and press interviews, are misleading. We have made the highest financial bid and had also obtained the highest score in the evaluation."

Binani Industries, the parent company of insolvent Binani Cement, had earlier informed the National Company Law Tribunal's Kolkata bench that it has moved the Supreme Court for termination of insolvency proceedings against its cement manufacturing subsidiary.

The company said it had filed the application in the apex court for setting aside the April 5 order of the National Company Law Appellate Tribunal (NCLAT), which observed that "pendency of the appeal will not come in the way of the Adjudicating Authority to proceed with the Corporate Insolvency Resolution Process in accordance with provision of I&B (Insolvency and Bankruptcy) Code, 2016".

"We have pleaded before the Supreme Court for setting aside the NCLAT order. The apex court will hear the case on April 13," counsel representing Binani Industries said. He said: "Binani Industries will also urge the Supreme Court for the termination of the insolvency proceedings against its subsidiary." The company had submitted an application to the tribunal to seek termination of insolvency proceedings against its cement manufacturing subsidiary and its counsel had said it could pay all its creditors.

The move came after it concluded a commercial understanding with UltraTech Cement to sell its entire 98.43 per cent stake in the subsidiary at a consideration of Rs 72.66 billion. Later, the offer was reportedly revised upwards. "We are offering Rs 11 billion more to the creditors than that of Dalmia Bharat in the out-of-tribunal settlement. The company is willing to settle with everyone with 120 per cent payment," the company's counsel said in his submission before the tribunal.