Kolkata: The Kolkata bench of the National Company Law Tribunal (NCLT) on Tuesday finished hearing the dispute over insolvency resolution at Binani Cement Ltd, with Dalmia Bharat Ltd, the highest bidder selected by the lenders to take over the assets, insisting that there was no question of allowing the revised bid of Ultratech Cement Ltd.
In his submission, the legal counsel for Dalmia Bharat made a sharp distinction between Ultratech and Liberty House Group, whose bid for Bhushan Steel and Power Ltd was summarily dismissed by the resolution professional. The Delhi bench of the tribunal ordered the committee of creditors of Bhushan Steel to reconsider Liberty House’s bid. Ultratech has cited the Delhi bench’s decision to argue that its revised bid, which is substantially higher, should be considered.
Dalmia Bharat has offered to pay Rs6,932.46 crore for Binani Cement whereas Ultratech has raised its bid to Rs7,960 crore, and claimed that in the interest of all stakeholders, its bid should be considered by the lenders.
“Accepting Ultratech’s bid will lead to better realisation for most stakeholders, but the fact that it was an unsuccessful bidder at the end of bidding process weakens its case,” said a senior lawyer, who has appeared in this matter.
Throttling up the battle for Binani Cement, Ultratech’s counsel Mukul Rohatgi had submitted at the tribunal last week that the AV Birla group company was willing to raise its offer by another Rs500 crore, if any other bidder was willing to match its offer. To strengthen its bid, Ultratech has also obtained advance clearance from the Competition Commission of India.
The bench will now have to choose between a “substantially higher bid” and the sanctity of the resolution process, said the unnamed lawyer cited above, asking not to be named. The tribunal has reserved its judgement for now. “Whichever way the verdict goes, the matter will go to the appellate tribunal and perhaps to the Supreme Court as well,” the lawyer added.
Both the committee of creditors and the resolution professional have maintained that it was decided at the beginning of the bidding process that they would negotiate only with the highest bidder, and hence Ultratech’s revised bid wasn’t considered.
Pratap Chatterjee, counsel for the committee of creditors, said the rules of the game couldn’t be changed after the game had started.
Apart from Ultratech, operational creditors of Binani Cement have also opposed Dalmia Bharat’s bid, saying that their dues of over Rs700 crore were to be settled for as little as Rs151 crore. The resolution professional has, however, accepted only Rs503 crore as legitimate dues to Binani Cement’s vendors.
Counsel for Dalmia Bharat, S.K. Kapoor submitted that claims of six operational creditors exceeding Rs10 crore each have been found to dubious through a forensic audit.
Though Ultratech has offered to pay Rs443 crore to operational creditors, it has declined to pay the dues of those vendors who are found to be related to the management of Binani Cement.
Kapoor said Dalmia Bharat has agreed to pay the dues of some 2,941 operational creditors in full. Their claims are up to Rs1 crore each.