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Kolkata: The Kolkata bench of the bankruptcy court on Wednesday ruled that the lenders of debt-ridden Binani Cement Ltd should consider the revised offer of UltraTech Cement Ltd even as it allowed Dalmia Bharat Ltd, chosen by lenders to take over the indebted cement-maker, to submit new bids, effectively restarting a contest between the two suitors.

After being outbid by Dalmia Bharat, UltraTech made a binding offer to pay Rs7,960 crore for the assets of Binani Cement, compared with Dalmia Bharat’s offer of Rs6,932.46 crore. However, Binani Cement’s lenders declined to consider UltraTech’s higher offer because it came after Dalmia Bharat was declared the highest bidder.

The lenders had decided before bids were received that they would negotiate only with the highest bidder, their legal counsel told the tribunal. Though UltraTech offered to pay over Rs1,000 crore more, they were constrained from considering it by rules they had themselves set.

Appearing for UltraTech, lawyer Mukul Rohatgi told the National Company Law Tribunal (NCLT) that UltraTech was ready to raise its bid by Rs500 crore more if Dalmia Bharat matched the current offer.

“It is made clear that if both (companies) are willing to participate in the bidding process, the committee of creditors is expected to allow both in the bidding process," the tribunal said in its order.

Graphic: Paras Jain/Mint
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Graphic: Paras Jain/Mint

With this verdict, the committee of creditors now has the legal sanction to consider UltraTech’s bid, said Ratnanko Banerji, senior counsel who represented Binani Industries Ltd, the parent of the beleaguered cement-maker.

In the same order, the bench has extended the time for finalizing a resolution plan for Binani Cement till 24 June. It will review progress on 4 June.

“We are surprised by the order passed by the NCLT today," Dalmia Bharat said in a statement. The insolvency resolution professional, or the administrator, and the committee of creditors had followed “the due process of law" in selecting the Dalmia Bharat-led consortium as the highest bidder, it said.

“In our view, any revised offer from an unsuccessful resolution applicant outside the resolution process cannot become a basis for setting aside the decision of the committee of creditors. We have strong conviction that we have followed the law as per due process and believe that we will eventually succeed. We will take all the appropriate steps required," Dalmia Bharat said.

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