In the latest twist to Binani Cement Ltd’s takeover proceedings, the Kolkata bench of the National Company Law Tribunal (NCLT) has asked the debt-laden company’s committee of creditors to evaluate a revised offer by UltraTech Cement Ltd.
The NCLT order ensures that the battle between Aditya Birla Group’s UltraTech Cement and Dalmia Bharat Ltd is far from over with both companies likely to submit fresh bids for Binani Cement.
UltraTech had challenged an earlier decision by the committee of creditors to declare Dalmia Bharat as the preferred bidder before the tribunal.
In recent weeks, UltraTech’s significantly higher offer had also forced some of Binani Cement’s creditors to backtrack on their earlier decision to vote in favour of Dalmia Bharat’s resolution plan.
NCLT has also asked UltraTech to submit a fresh bid before Binani Cement’s resolution professional this week and has extended the deadline to June 24. Dalmia Bharat will also have the option to revise its offer.
The initial 270-day time frame for approving the bankruptcy resolution plan for Binani Cement had expired on April 21, but the NCLT had extended the time frame after deducting the period of litigation.
When contacted, UltraTech declined to comment, but an emailed statement by Dalmia Bharat said that the order has taken the company by surprise and it would take "appropriate steps". "In our view, any revised offer from an unsuccessful resolution applicant outside the resolution process cannot become a basis of setting aside the decision of the CoC. We have a strong conviction that we have followed the law as per the due process and believe that we will eventually succeed.” The company, however, did not say if it plans to challenge the order.
Last month, UltraTech had asked for a re-evaluation of the company’s revised bid of Rs 7,966 crore by Binani Cement’s committee of creditors. It had also alleged that the resolution process followed by Dalmia Bharat was “fraudulent”.
Binani Cement is undergoing insolvency proceedings initiated by the NCLT since July 2017. In February, UltraTech and a consortium of Dalmia Bharat and Bain-Piramal’s India Resurgence Fund had separately bid for the company.
The Dalmia-Bain Piramal consortium emerged as the preferred bidder with an offer of Rs 6,300 crore, despite Ultratech’ revised bid of Rs 7,266 crore.
UltraTech was not declared the winner in view of the penalty imposed by the Competition Commission of India for indulging alleged cartelisation with 10 other cement manufacturers.
However, UltraTech subsequently entered into an arrangement with the promoters of Binani Cement to provide Rs 7,266 crore ($1.1 billion) to help terminate the insolvency proceedings against the cement unit. It had also obtained the CCI’s approval for its bid to acquire Binani Cement.
Dalmia Bharat had also challenged the arrangement between Binani and Ultratech, arguing that the lenders had approved its resolution plan and an agreement outside the NCLT would be illegal. The two companies had been in a deadlock for the takeover of Binani Cement ever since.