The NCLAT’s interim order had stated that during the pendency of Dalmia Bharat’s appeal, the CoC can approve any plan it deems fit but that will be subject to its final decision.
Though the Supreme Court on Thursday rejected Dalmia Bharat’s plea seeking a stay on the National Company Law Appellate Tribunal’s (NCLAT) May 4 order, which allowed the resolution professional and the committee of creditors of Binani Cement to consider the bid of UltraTech Cement, the lenders’ meet scheduled for the day was cancelled by the RP after Dalmia Bharat in a letter to him raised the issue of UltraTech’s ineligibility under Section 29A of the IBC. The NCLAT’s interim order had stated that during the pendency of Dalmia Bharat’s appeal, the CoC can approve any plan it deems fit but that will be subject to its final decision. Dismissing Dalmia Bharat’s plea on Thursday, a bench led by justice Rohinton Nariman requested the NCLAT to decide Dalmia Bharat’s petition expeditiously on a day-to-day basis. The NCLAT is slated to hear the matter on May 22.
Though with the SC’s dismissal of Dalmia Bharat’s appeal the ground was set for the CoC meeting to consider the revised offer of UltraTech Cement but the RP Vijaykumar Iyer cancelled the scheduled meeting after Dalmia Bharat group raised objections to UltraTech’s bid, saying that the latter had become ineligible to participate in the auction after acting in concert with Binani Industries to exit the insolvency process. In a letter to the members of the CoC on Wednesday evening, the RP said, “I have received objections from Rajputana Properties (the subsidiary firm of Dalmia Bharat) in relation to eligibility of UltraTech Cement under Section 29A of the Insolvency and Bankruptcy Code, 2016, to be a resolution applicant of Binani Cement (“corporate debtor”).
As per the requirements of the code and the principles laid down by various NCLTs, I have taken cognizance of the objections and will review the facts and the law and take such other measures as is necessary to make my determination on the matter”. He said in the letter that in view of the objections raised and to make an “independent, careful, fair and reasoned determination”, he was informing the CoC members that the meeting scheduled on May 10 in Mumbai “stands cancelled”. Atul Daga, chief financial officer, UltraTech Cement, told FE that his company has already approached the RP to hold a CoC meet as early as possible to ‘close’ the insolvency resolution process as Dalmia Bharat’s allegations were ‘baseless’.
“The letter which Dalmia Bharat has written to the RP is baseless, there is no violation of Section 29A of IBC. They are trying to do a last minute attempt to do something to delay the process, because they are not able to match our bid,” Daga said. “I am sure that the RP will call the creditors’ committee meet very soon and close the insolvency resolution process,” he added. A Binani Industries (BIL) source also said his company was also planning to write a letter to the RP, asking him to hold the CoC meeting immediately. RP Vijaykumar V Iyer was not available for a comment. As reported earlier, while the Kolkata bench of the NCLT had allowed UltraTech’s revised bid to be considered, it had also offered the Dalmia Bharat-controlled Rajputana Properties a chance to better its offer of Rs 6,930 crore.
This bid, which includes an infusion of working capital and capex, had been declared the highest bid (H1) on February 27. UltraTech Cement had improved its offer to Rs 7,900 crore, after submitting an earlier revised bid of over Rs 7,200 crore to the RP on March 8. UltraTech had claimed that negative points had been wrongly assigned to its bid, making it the H2 and not H1 bidder. In FY17, Binani Cement had posted a net loss of Rs 348 crore on revenues of Rs 1,527 crore, according to data from Capitaline. As per details on Binani Cement’s website, financial creditors of the company had claimed Rs 6,470.26 crore, while the NCLT had admitted claims worth Rs 6,469.36 crore.
via Binani Cement Insolvency: SC rejects Dalmia plea for stay on NCLAT order – The Financial Express