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NCLT ruling on Bhushan Power & Steel boosts UltraTech plea for Binani

Ultratech to appeal to Kolkata bench of NCLT to ask Binani Cement CoC to consider its revised offer, which is Rs 11 bn higher than the one already approved

Avishek Rakshit  |  Kolkata 

NCLT

The recent order by Delhi in the case admitting a bid after completion of the bidding date, has made the case stronger for UltraTech Cement, which lost out to in the race for acquisition of the hitherto bankrupt

The legal counsel of UltraTech Cement, which had touched upon the decision from Delhi on Monday's hearing told Business Standard that they are going to cite this ruling as a "precedence set by NCLT" to appeal to the Kolkata bench of to ask the (CoC) of to consider the revised offer from which is Rs 11 billion higher than the one the has already approved.

The Delhi bench of NCLT on Monday allowed the bid from for acquisition of despite filing its bid after closure of the bidding process and its choosing as the H1 bidder.

"This certainly strengthens the case for Liberty House' bid was outside the deadline and it has still been admitted. On the other hand, UltraTech Cement's bid was submitted well in advance before the deadline and it only revised its offer", Siddhartha Mitra, legal counsel representing in the Kolkata bench of NCLT told this newspaper.

On Monday, Mitra told the tribunal that the of had more than a month to consider the revised offer from the company and there wasn't any need to hurry to select the offer from as the preferred bid when a higher offer from his client was placed before the CoC of Binani Cement.

Sources close to UltraTech Cement said the Kolkata bench of NCLT is aware of the ruling of the Delhi bench of NCLT on this matter and added that while the Kolkata tribunal passes judgement on the race for Binani Cement, it is likely to consider the ruling as well.

UltraTech Cement has challenged the selection process of the H1 bidder and has contended that it was ranked lower than on account of flawed selection criteria, despite it upping its bid to over Rs 79 billion under which neither financial and operational creditors nor statutory authorities will be taking any haircut.

Some of the leading lenders to Binani Cement are also keen to accept UltraTech Cement's new offer provided it is legally viable and has consent from legal authorities.

The Kolkata bench has also been asking the CoC as well Dalmia Bharat that why it didn't modify the process document despite receiving higher bid amount.

The CoC responded that such a move will set a bad precedence and added that it had followed guidelines from the (CVC) and the (IBA) while framing the process document.

On the other hand, UltraTech Cement has contended that there is no such law which prescribes the CoC not to consider the offer from a runner-up bidder and is a set of guidelines while the is used for open tenders in the government.

Jinan K. R., member - judicial at the Kolkata bench of NCLT, on Monday, however, said that guidelines are applicable for banks and not for the CoC.

Exim Bank, one of the public sector banks, which is taking an over 20 per cent haircut under the Dalmia Bharat Cement's resolution plan has also contended that the process document did not prevent the CoC from either negotiating with a runner-up bidder or consider a non-H1 plan.

On the other hand, sources close to Dalmia Bharat Cement stated that the Delhi bench of NCLT's ruling on the Bhushan Power & Steel case will not impact the Binani Cement saga as "these two cases are entirely different".

On April 24, the Kolkata bench of NCLT is expected to complete hearing of all cases and related petition on the Binani Cement case.

Supreme Court declines relief to Binani Cement operational creditors

MJ Anthony

The Supreme Court on Monday declined to grant any relief to the operational creditors of Binani Cements, which is undergoing insolvency proceedings in the NCLT in Kolkata. The operational creditors include coal firms, transporters and cement bag suppliers.

The operational creditors had moved an application before the court while it was hearing a few petitions challenging the constitutional validity of IBC.

Swiss Ribbons and other firms allege that several provisions of the code are invalid. The court had earlier asked Attorney General K K Venugopal to respond to the petitions. The court, however, adjourned the case till May 4.

One important argument against the code is that the method of appointment to the NCLT and NCLAT are against the principles laid down earlier by the Supreme Court. Therefore, according to the petitions, all appointments made to the tribunals before the 2018 amendment to Section 412 of the Act are bad in law.

First Published: Mon, April 23 2018. 22:36 IST
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