Binani moves SC to settle lender dues

Binani Industries moved the Supreme Court on Monday seeking permission for an out-of-court settlement with lenders and termination of insolvency proceedings against subsidiary Binani Cement. The matter will come up for hearing on April 13.

Confirming the development, Sameer Kaji, senior group adviser, Binani Industries told The Hindu, “We are seeking to clear all dues and termination of the insolvency proceedings.

‘Borrower’s right’

“The borrower always has the right to settle his or her liabilities without any haircuts to the lenders.”

The company moved the apex court after the National Company Law Appellate Tribunal (NCLAT) had asked the National Company Law Tribunal (NCLT), to proceed with the resolution process of Binani Cement only under the provisions of the Insolvency and Bankruptcy Code (IBC).

“The IBC is not designed to penalise a promoter and/or shareholder by preventing/prohibiting him/her to make a payment of 100% legitimate dues and become a mute spectator to his/her company being sold at a huge discount, causing financial loss to financial lenders, trade operational creditors, public equity holders etc,” said a spokesperson for Binani Industries.

Lenders’ support

Binani Industries has received support from most of the lenders for the ₹7,618 crore offer [it has received for the cement arm] except Canara Bank, which has about 4% exposure to Binani Cement’s total debt. The lenders are learnt to have accepted Binani Industries’ offer, subject to a higher adjudicating authority approving it.

UltraTech Cement Ltd. was initially outdone by by Dalmia Bharat’s bid but later struck a deal with Binani Industries for ₹7,266 crore, subject to termination of the insolvency proceedings against Binani Cement.

“The preamble of the IBC works on the basic ethos of maximising value for all stakeholders,” the spokesperson said.

“Keeping this in mind, a borrower always has the right to pay off all dues of all lenders and creditors and redeem the company from all mortgages. Based on this basic principle the company has appealed to the lenders / CoC for a settlement outside the CIRP process,” the spokesperson said.