The bid by UltraTech is nearly Rs 1,000 crore higher than the lead competitor Dalmia Bharat's offer.
The committee of creditors (CoC) for Binani Cement May 28 voted in favour of accepting UltraTech Cement’s Rs 7,950 crore bid.
This comes even as the Dalmia Bharat-led consortium has moved the Supreme Court asking Aditya Birla Group's UltraTech Cement be disqualified to bid for the stressed assets of Binani Cement.
The bid by UltraTech is nearly Rs 1,000 crore higher than the offer by Dalmia Bharat Group's wholly-owned subsidiary Rajputana Properties, the other bidder being considered by the creditors.
Financial creditors led by Edelweiss Asset Reconstruction Company voted to accept UltraTech Cement’s offer as the highest bid received under the insolvency and bankruptcy process initiated against Binani Cement.
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"The bid exceeded lenders’ expectation of recovery...Dalmia Bharat’s claim that UltraTech is ineligible to vote under Section 29(A) was unsubstantiated, but the CoC would abide by the Supreme Court’s ruling on Dalmia Bharat’s allegation even if UltraTech’s proposal was passed at the meeting," said a banking source.
The source said all the financial lenders’ claim of interest would be paid “as-on-date” and Dalmia Group further declined to increase the bid offer.
Other lenders part of the CoC include IDBI Bank, Bank of Baroda, Bank of India and State Bank of India (SBI).
Binani Cement, which owes Rs 6,469 crore to its financial creditors, is among the top 12 companies referred by the Reserve Bank of India for insolvency proceedings.
Another banker said, "UltraTech Cement’s bid received approval from over 90 percent of the outstanding debt to lenders in value terms."
Under the current rules, a proposal needs approval from at least 66 percent of lenders by value, to go through.
The National Company Law Tribunal (NCLT) had asked lenders to reconsider UltraTech Cement’s bid after they had rejected it earlier.
UltraTech Cement was not allowed to revise its bid for Binani Cement since lenders had agreed to not entertain the second highest bidder in the case. UltraTech Cement tried multiple times to revise its bid for Binani Cement, however, the creditors did not consider it as the offer was made after the deadline.
Thereafter, a parallel deal with UltraTech was signed in agreement with Binani Industries. This entailed to buy its cement assets for Rs 7,266 crore and the lenders would withdraw its application to terminate the insolvency process.
However, this agreement to settle out of court was rejected.
In its May 2 order, the NCLT had said the decision of the creditors’ panel to deny UltraTech an opportunity to be heard once its resolution plan was rejected is unfair, unjust and against the very objective of the IBC. It stated the resolution professional and the CoC are duty-bound to ensure value maximisation for shareholders of Binani Cement.
The lenders’ argument that UltraTech had sent an offer on email and did not adhere to the timelines and process is not substantive, the NCLT ruled.
The tribunal had also accepted the argument of EXIM Bank and Binani Cement’s operational creditors that they have been discriminated against and held that the plan proposed by Dalmia Group needs to be modified to account for their claims