The takeover battle between Ultratech Cement Ltd and Dalmia Bharat Ltd for debt-ridden Binani Cement Ltd stretched further on Friday as the National Company Law Tribunal didn't rule in favour of either suitor.
Instead, the Kolkata bench of the NCLT passed an interim order asking the resolution professional to continue managing Binani Cement until further directions. The next hearing is scheduled for Monday, 23 April.
The Insolvency and Bankruptcy Code has set a 270-day deadline for the NCLT to finalise a resolution plan for bankrupt companies. The deadline for Binani Cement expires on Saturday. However, the NCLT is likely to extend the time period for the resolution after deducting the litigation period from the insolvency proceedings.
Aditya Birla Group-owned UltraTech and Dalmia have been arguing their case for the past three hearings at the tribunal.
On Thursday, UltraTech’s counsel had asked for a re-evaluation of the company's heightened bid of Rs 7,966 crore by the committee of creditors of Binani Cement and termed the resolution process followed by Dalmia Bharat as “fraudulent”. Exim Bank, a lender to Binani Cement, has come out in favour of UltraTech’s raised offer.
On Friday, Dalmia Bharat’s counsel argued that UltraTech had been changing its offer from time to time and that this should be considered as a “non-responsive” bid. The counsel said that the NCLT has limited power to accept or reject a plan already approved by the committee of creditors , which had approved Dalmia's proposal in March.
Binani Cement has been undergoing insolvency proceedings initiated by the NCLT since July 2017. In February, UltraTech and an equal joint venture between Dalmia Bharat and Bain-Piramal’s India Resurgence Fund had separately bid for Binani Cement.
The Dalmia consortium emerged as the preferred bidder with a bid of Rs 6,300 crore, despite Ultratech raising its offer to Rs 7,266 crore. UltraTech was not declared the winning bidder owing to certain penalties imposed by the Competition Commission of India.
UltraTech subsequently entered into an arrangement with Binani Cement’s parent to provide Rs 7,266 crore ($1.1 billion) to help it terminate the insolvency proceedings against the unit. It also obtained the CCI’s approval for its bid to acquire Binani Cement. Dalmia Bharat has challenged this agreement citing that the lenders had approved its resolution plan and an agreement outside the NCLT would be illegal.