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UltraTech Cement has inched closer to acquiring Binani Cement, with the committee of creditors (CoC) voting to accept the Aditya Birla Group company’s ₹7,950-crore bid.
According to sources close to the lenders, UltraTech’s bid exceeded that of Dalmia Bharat by about ₹1,000 crore. Binani Cement owes ₹6,469 crore to its creditors.
The lenders will not have to take a haircut if UltraTech’s bid gets a final approval from the courts.
Under the insolvency rules, a resolution proposal needs the approval of 75 per cent of lenders. On Monday, UltraTech’s bid was approved by over 90 per cent of the lenders. It is not known which lenders opposed the proposal.
The matter will now be presented before the National Company Law Tribunal (NCLT) for approval. However, the Dalmia Bharat Cement-led consortium has already moved the Supreme Court challenging UltraTech’s eligibility. Dalmia had also moved the National Company Law Appellate Tribunal (NCLAT). UltraTech has to clear these hurdles before it can claim Binani Cement.
Protracted proceedings
The case has seen many twists and turns over the last few months, testing the new insolvency laws. The resolution professional had initially picked the Dalmia Bharat consortium as the winning bidder.
UltraTech then raised its offer, but this offer was not considered as it was unclear if a bidder could revise an offer once all the bids had been opened.
Meanwhile, UltraTech and Binani complained against the decision to select Dalmia Bharat and mooted an out-of-court deal, outside the insolvency process. The matter was put to rest with the court asking the lenders to consider UltraTech’s revised offer.
Earlier, the CoC meeting scheduled on May 10 was called off after the resolution professional, Vijaykumar Iyer, said he wanted a legal opinion on Dalmia Bharat’s claim that UltraTech was ineligible to bid under Section 29A of the Insolvency and Bankruptcy Code.
Armed with the court ruling, the CoC of Binani Cement had given an ultimatum to Dalmia Bharat to better UltraTech’s offer or exit the bidding process. Dalmia Cement, however, has been insisting that its first bid is still valid, and is certain to seek legal relief.
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