Kolkata: Aditya Birla Group’s UltraTech Cement Ltd is likely to get support from Committee of Creditors (CoC) of Binani Cement in the ongoing fight for control after the Birla company issued comfort letter worth Rs7,266 crore to Binani group for 98.43% stake.

UltraTech had said that Binani Industries Ltd—the promoter firm of Binani Cement—had approached it for arranging funds to pay off the lenders. “As a creditor, we support the UltraTech offer as it offers a better deal for us," an official from a lead creditor said. This is despite the CoC’s approval of the Dalmia Bharat’s bid.

“Since, the Insolvency and Bankruptcy Code (IBC) proceedings initiated about 7-8 months back on Binani, a moratorium on interest had been imposed. The UltraTech offer allows the loan to a regular one and there will be no haircut even in the interest loss in the interim period," the official said.

A revised bid after the CoC approval is perhaps a first instance and legal opinions remain divided on its sanity. But, if the NCLT proceeding is challenged in the Supreme Court, CoC will support the move.

The bid by Dalmia Bharat Cement jointly with Bain Capital’s Resurgent India Fund of Rs6,350 crore has been to buy Binani Cement offering 20% equity in Binani to the lenders. The total secured and unsecured debt of financial creditors is around Rs6,265 crore, of which the largest exposure is from Edelweiss ARC with an outstanding of about Rs2,775 crore.

The Dalmia offer covered the financial creditors but several small operational creditors have claimed their debt has not been taken care of properly and haircut of even 80% was sought, said Rajesh Tibrewal, who is representing these operational creditors. “We have also moved an intervention petition against the resolution professional (RP) for neglecting our interest and the same was listed for hearing on 22 March, he said. The MSME operational creditors’ dues are about Rs700 crore in Binani Cement, he added.

Tibrewal said that the insolvency law does not treat operational creditors at par with financial creditors which is lacunae in the law.

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