Acting upon the National Company Law Tribunal’s (NCLT’s) suggestion to consider Binani Cement’s proposal to pay back its lenders in an out-of-court settlement, the committee of creditors (CoC) will meet on Thursday to discuss the matter.
Sources said the merits, demerits and legal implications of the proposal would be discussed at the meeting.
The CoC has already approved Dalmia Bharat Cement-led consortium’s Rs 65-66 billion proposal. It has issued a letter of intent (LoI) to Dalmia Bharat Cement. The company, which is the H1 bidder, has deposited Rs 3 billion with the lenders to honour the LoI. Binani Cement’s proposal is for Rs 72.66 billion.
The plan offered by Binani Cement follows UltraTech Cement’s offer to buy a 98.47 per cent stake in Binani Cement directly from the promoters. The rider is that insolvency proceedings against Binani Cement will have to stop. It is based on this rider that Binani Cement approached the Kolkata bench of the NCLT.
Sources in Binani Cement said the entire money earned from the sale to UltraTech Cement would be used to pay back the lenders.
A source close to Dalmia Bharat Cement said it was unlikely the H1 bidder would revise its bid to match the one which will be up for consideration now. “The LoI has been issued; it shows that the creditors are okay with the amount the Dalmia Bharat-led consortium quoted in their bid,” the source added.
The Competition Commission of India (CCI), on Wednesday, approved UltraTech Cement’s appeal that its acquisition of Binani Cement does not result in adverse effect on the competitive scenario in the cement industry.
After CCI’s approval, while UltraTech Cement claimed that it was because of the resolution professional’s apprehension over CCI nod that it was rated as the runner-up, Dalmia Bharat Cement hit back claiming that the sole criteria involved if there were regulatory orders including CCI on the bidder over the last 5 years and termed UltraTech Cement’s claim as misleading.
Dalmia Bharat Cement-led consortium’s proposal, on the contrary, may result in operational lenders taking moderate to severe haircuts.