UltraTech Cement is now willing to pay Rs 79.60 billion, which is Rs 7 billion more than its earlier offer, to take over Binani Cement, a bankrupt firm. However, the revised offer has failed to impress many of the lenders to Binani Cement.
Sources close to UltraTech Cement said the matter relating to the hiked offer had been communicated to the resolution professional, Vijay Kumar Iyer, and the Committee of Creditors (CoC). The CoC has acceded to the Dalmia Bharat-led consortium’s (UltraTech Cement's rival) plan and issued a letter of intent, based on which it has received part of the payment in accordance with the approved plan.
A source said, “It now needs to be seen if the CoC, as well as the National Company Law Tribunal (NCLT), takes cognizance of the new offer, which is Rs 11 billion higher than the offer of the winning bidder.”
UltraTech Cement, an Aditya Birla Group company, filed an affidavit with the Kolkata Bench of the NCLT on April 16. The tribunal will resume hearing the case on April 17.
“The matter went to the Supreme Court and is back in the NCLT. We are not keen to have any more meetings to consider fresh or renewed offers unless ordered to do so. Bidders are at liberty to increase offers but we will follow what the NCLT and the judicial authorities decide,” a key lender to Binani Cement told Business Standard.
The lender said the creditors had taken note of the Supreme Court proceedings on April 13 and concluded that the two-judge Bench wasn’t keen on allowing an out-of-court settlement or didn’t feel like intervening in the matter.
Earlier the NCLT, based on a petition moved by the promoters of Binani Cement, had suggested an out-of-court settlement between the promoters and the lenders. UltraTech Cement is financing Binani Cement in repaying the lenders. In lieu of this, it was decided that UltraTech Cement will take over 98 per cent in the troubled firm.
“We asked the promoters of Binani Cement to obtain the Supreme Court’s approval but they withdrew their petition and the highest court was unable to pass a judgment. On the other hand, we have considered Binani Cement’s proposal based on the suggestions of the NCLT. Now it is up to the judicial authorities to take a call,” a second lender told Business Standard.
The lenders had first turned down the UltraTech Cement-backed proposal but retracted and said the offer was “superior and excellent” compared to what they had approved.
Meanwhile, Dalmia Bharat has written to the Central Vigilance Commission and the Reserve Bank of India, asking for a probe into what it calls a “flouting of laws, which has alarmed some of the lenders and irked some of them”.
Sources in Binani Cement, however, said that the two-member panel of judges in the Kolkata Bench of the NCLT has reserved the order after hearing the case and the out-of-court settlement route stil remains open for the defaulting cement maker.
Earlier, after losing out to Dalmia Bharat at the end of the bidding process, UltraTech Cement had upped its bid to Rs 72.66 billion hoping to outbid the Dalmia Bharat’s offer.
However, after its revised offer was allegedly rejected in the voting process on March 14, it concluded an agreement directly with Binani Industries to takeover over 98 per cent of the stakes offering a similar amount — the rider being termination of the IBC proceedings. After the lenders’ meeting, UltraTech Cement increased this out-of-court settlement offer to financially back Binani Cement to over Rs 76 billion and finally, with not even a week left before the stipulated 270 days expire under IBC rules, it again increased its offer to Rs 79.6 billion.