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Insolvency proceedings: Try out-of-court deal for Binani Cement, says NCLT

Tribunal tells committee of creditors to consider company's own higher offer

Avishek Rakshit  |  Kolkata 

Binani

Aiming at maximising value, a two-member Bench in the (NCLT), Kolkata, has suggested an out-of-court settlement to lenders of Cement and asked the (CoC) to consider a proposal mooted by the company itself.

The observations were made by the Bench while hearing petitions filed in the insolvency resolution process.


This is despite the fact that the resolution professional for Cement has submitted a plan by a Dalmia Bharat-led consortium, which has been approved by the creditors and is awaiting the NCLT’s approval.

While hearing a plea from Cement, which is seeking termination of and has proposed to clear all its dues by April 10, Jinan K R, member-judge at the Kolkata NCLT asked: “In the larger interest of all creditors, a harmonious settlement which has come up for consideration can always be looked into. We have enough time to complete the process, so why are you not amenable to an out-of-court settlement?”


However, after counsel representing Dalmia Bharat and Bain Capital’s Resurgent India Fund protested saying the insolvency process was under way, Jinan said his reference to “out of court” was a suggestion and not an order.

At the end of the hearing, Jinan asked the to “appropriately consider” Binani Cement’s offer “at the creditors’ liberty”. The has been asked to reply by April 2, the next date of hearing.

The counsel representing the said the NCLT could not suggest an out-of-court settlement and only the Supreme Court was empowered to do so.

Earlier in the day, the counsel for Dalmia Bharat asked the Bench to consider its takeover plan. The Bench said it would hear the petitions by the order of filing and a verdict could not be pronounced before other related applications were heard.


After UltraTech Cement’s revised bid of Rs 72.66 billion was rejected by the CoC on the grounds that the Dalmia Bharat-led consortium had already emerged the highest bidder with a Rs 65-66 billion resolution plan, the Aditya Birla Group firm directly negotiated a deal with Binani Cement, offering to pick up a 98.47 per cent stake in the company for the same amount it offered in the revised bid.

THE STORY SO FAR

July 2017 - files insolvency petition against in the Kolkata bench of the NCLT

Feb 24, 2018 - discusses resolution plans of all applicants

Feb 27- Dalmia Bharat-led consortium emerges highest bidder with Rs 63.50-bn offer for Binani Cement

March 7 - raises bid to Rs 72.66 bn

March 13- NCLT asks resolution professional to explain the process in selection of Dalmia Bharat; resolution professional alleges fraud, submits application in NCLT

March 14- CoC votes in favour of Dalmia Bharat’s proposal; resolution professional issues letter of intent

March 19 - NCLT adjourns case till March 22; negotiates agreement directly with Binani Cement to pick up 98.43% stake for Rs 72.66 bn subject to termination of proceedings

March 20 - Dalmia Bharat-led consortium deposits 10% of bid amount

March 22 - NCLT hears and Binani Cement’s allegations against the resolution professional; orders resolution professional to respond by March 26

March 27- After hearing Binani Cement’s petition to terminate proceedings, NCLT asks CoC to consider the proposal; suggests for out-of-court settlement

First Published: Tue, March 27 2018. 23:52 IST
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