With the Supreme Court indicating it was not in favour of any out-of-court settlement, Binani Industries Ltd on Friday withdrew its plea seeking an end to the bankruptcy proceedings against its subsidiary, Binani Cement, and permission for an out-of-court settlement with UltraTech Cements.
A Binani spokesperson told BusinessLine that the company would wait for the verdict of the NCLT and NCLAT on Monday and April 19.
“We are disappointed by today’s development as we were expecting that the Court will give its approval for an offer which will yield ₹1,000 crore more to the creditors,” he added.
Dalmia Cement (Bharat) said the Supreme Court’s stand on Binani Cement’s petition upholds the primacy of the insolvency laws.
Mahendra Singhi, Group CEO, Dalmia Cement, said: “We are encouraged by the fact that the primacy of the IBC code in insolvency cases is established. This will help facilitate speedy resolution of the mounting NPAs of the banking sector,” he said.
Binani Industries had struck a ₹7,600-crore deal with UltraTech, ₹1,000 crore higher than Dalmia Bharat Ltd’s winning bid in the insolvency proceedings. UltraTech had also bid for the company in the auction but its bid was not preferred.
Binani Cement owes ₹6,500 crore to various banks and asset reconstruction companies.
Lenders had backed its settlement deal with UltraTech, but had asked the former to seek approval from the Supreme Court as only the apex court can approve an out-of-court settlement while the insolvency process is on.
“…the Supreme Court of India has unequivocally upheld the principles of decision making on Resolution Plans under the Insolvency and Bankruptcy Code,” said Shardul S Shroff, Executive Chairman of law firm Shardul Amarchand Mangaldas & Co.
Binani Industries, the promoter of Binani Cement, has withdrawn its petition seeking the Supreme Court approval to pull out of the ongoing insolvency proceeding and sell it to Aditya Birla Group company UltraTech Cement at a higher price than what was discovered at insolvency bidding process.
The committee of creditor had declared Dalmia Cement bid of about ₹6,600 crore as the highest for acquiring the stressed asset of Binani Cement. However, the second highest bidder UltraTech Cement enhanced its bid by ₹700 crore at the last moment. Later, Binani Cement and UltraTech agreed to reach an out-of-court settlement for ₹7,300 crore. However, this has been challenged in the legal forum.
A Binani spokesperson told BusinessLine that the company will wait for the verdict of NCLT and NCLAT on Monday and April 19.
“We are disappointed on today’s development as we were expecting that the court will give its approval for an offer which will yield ₹1,000 crore more to the creditors,” he added.