The total liability of Binani Cement Ltd stands at Rs7,290 crore including the liability of Rs4,049 crore towards secured lenders, the Supreme Court was told. Photo: HT
The total liability of Binani Cement Ltd stands at Rs7,290 crore including the liability of Rs4,049 crore towards secured lenders, the Supreme Court was told. Photo: HT

Supreme Court to hear Binani Cement’s plea for out-of-court settlement

Binani Industries has agreed to sell Binani Cement to UltraTech Cement for Rs7,266 crore, a deal opposed by suitor Dalmia Bharat as it was struck outside the scope of the insolvency and bankruptcy code

New Delhi: Binani Industries Ltd moved the Supreme Court on Monday seeking permission for an out-of-court settlement and end insolvency proceedings against its debt ridden subsidiary, Binani Cement Ltd.

The company’s lenders have asked for necessary permissions to be obtained before they proceed with the settlement.

The matter was mentioned before a bench headed by Chief Justice Dipak Misra, who said that it will be taken up for hearing on 13 April.

While seeking an end the resolution process, Binani Industries said that it had struck a deal with UltraTech Cement Ltd for Rs7,266 crore. UltraTech was one of the initial bidders in the resolution process.

The total liability of Binani Cement Ltd stands at Rs7,290 crore including the liability of Rs4,049 crore towards secured lenders, it was stated.

It was claimed that the original promoters of UltraTech had mobilized sufficient funds to clear off all the outstanding claims against lenders/financial creditors resulting which Binani Cement would be restored to its full financial health.

Last week, the committee of creditors (CoC) of Binani Cement had decided to stick with the offer of Rs6,350 crore to buy Dalmia Bharat Cement for the debt-ridden firm’s sale under the Insolvency and Bankruptcy Code, 2016.

Moreover, the National Company Law Appellate Tribunal (NCLAT) had also asked the adjudicating authority, which is the National Company Law Tribunal (NCLT), to proceed with the resolution process of Binani Cement as per the IBC.

Hearing at the Kolkata bench of the National Company Law Tribunal (NCLT) has been adjourned till 16 April in view of the Supreme Court agreeing to hear the dispute later this week.

On 5 April, while posting the matter for further hearing on 19 April, the National Company Law Appellate Tribunal had stated that “pendency of the appeal will not come in the way of the adjudicating authority to proceed with the corporate insolvency resolution process in accordance with the provisions of I&B Code, 2016."

The Dalmia Bharat-Bain Piramal consortium has warned that lenders will be in breach of contract if they accept Binani Industries’ offer, since 99.5% of them had initially agreed to Dalmia’s bid and had entered a binding contract with them. Mahendra Singhi, Group CEO, Dalmia Cement Bharat Ltd, said, “We haven’t heard anything from the lenders that they are keen on UltraTech’s revised offer. The promoters of Binani Cement seem to have come to an agreement with UltraTech outside the IBC process. They are acting as a defeated bidder’s proxy, which itself should disqualify them.

“We will fight to uphold the IBC law. You can’t work outside the law just for a few hundred crores," Singhi added.

Two weeks ago, Binani Industries’ troubled cement assets were almost a done deal for the Dalmia-led consortium but is now in danger of slipping through its fingers. UltraTech’s second and more aggressive bid of Rs7,618 crore for these assets and a promise to pay back all dues in full has won the tacit support of both banks and trade creditors.

Countering Singhi’s argument, Sameer Kaji, Senior Group Advisor, Binani Industries Ltd told Mint that a borrower or mortgager can redeem a pledge or pay back a loan anytime he wished to. “We are offering to pay back all lenders and operational creditors in full. I’m not settling or negotiating with lenders by offering a lower haircut on their loans. This sets our case apart from all other companies in bankruptcy proceedings."

By the time of publishing this article, the resolution professional in this case and a spokesperson for the Aditya Birla group hadn’t respond to requests for comment.

Tanya Thomas contributed to this story.

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