In a move that could have major implications for ongoing insolvency proceedings, the Supreme Court has approved the revised offer of UltraTech Cement to acquire Binani Cement.

Rejecting the petition filed by Dalmia Cement’s Rajputana Properties challenging the order of the National Company Law Appellate Tribunal, the Bench of Justices Rohinton Nariman and Navin Sinha said, “there was no infirmity in approval granted by the NCLAT’.

“The two important principles of maximisation of value and equality among creditors, which came out in the NCLAT order, was upheld by the Supreme Court,” Dhaval Vussonji of Dhaval Vussonji and Associates, who represented operational creditors in the Supreme Court, told BusinessLine .

Case history

Dalmia Cement on Thursday filed a petition in the Supreme Court against the NCLAT order approving UltraTech’s ₹7,900-crore offer as the highest bidder for buying out the stressed Binani Cement asset. Initially, Dalmia Bharat-Bain Piramal consortium Rajputana Properties’ bid of ₹6,930 crore was declared the highest bid by the Committee of Creditors for Binani Cement ahead of UltraTech Cement’s offer of ₹6,500 crore.

However, just before the CoC issued a letter of intent to Rajputana Properties, UltraTech revised its offer by ₹700 crore to ₹7,200 crore and further to ₹7,840 crore, thus covering the entire debt and interest of all the debtors.

Dalmia Bharat Cement did not revise its offer even after getting an opportunity from the CoC.

Implications

The apex court’s ruling could have implications for other cases under the IBC, including Essar Steel, where its existing promoters Ruias have offered a last-minute counter bid beating the offer made by ArcelorMittal.

The court ruling has re-affirmed that the insolvency process must seek to extract maximum value from resolution of stressed assets and ensure that interests of operational creditors (who are not part of CoC) are also well served.

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