Aiming at maximising value, a two-member Bench in the National Company Law Tribunal
(NCLT), Kolkata, has suggested an out-of-court settlement to lenders of Binani
Cement and asked the committee of creditors
(CoC) to consider a proposal mooted by the company itself.
The observations were made by the Bench while hearing petitions filed in the insolvency resolution process.
This is despite the fact that the resolution professional for Binani
Cement has submitted a plan by a Dalmia Bharat-led consortium, which has been approved by the creditors and is awaiting the NCLT’s approval.
While hearing a plea from Binani
Cement, which is seeking termination of insolvency proceedings
and has proposed to clear all its dues by April 10, Jinan K R, member-judge at the Kolkata NCLT asked: “In the larger interest of all creditors, a harmonious settlement which has come up for consideration can always be looked into. We have enough time to complete the process, so why are you not amenable to an out-of-court settlement?”
However, after counsel representing Dalmia Bharat and Bain Capital’s Resurgent India Fund protested saying the insolvency process was under way, Jinan said his reference to “out of court” was a suggestion and not an order.
At the end of the hearing, Jinan asked the CoC
to “appropriately consider” Binani
Cement’s offer “at the creditors’ liberty”. The CoC
has been asked to reply by April 2, the next date of hearing.
The counsel representing the CoC
said the NCLT could not suggest an out-of-court settlement and only the Supreme Court was empowered to do so.
Earlier in the day, the counsel for Dalmia Bharat asked the Bench to consider its takeover plan. The Bench said it would hear the petitions by the order of filing and a verdict could not be pronounced before other related applications were heard.
After UltraTech Cement’s revised bid of Rs 72.66 billion was rejected by the CoC
on the grounds that the Dalmia Bharat-led consortium had already emerged the highest bidder with a Rs 65-66 billion resolution plan, the Aditya Birla Group firm directly negotiated a deal with Binani
Cement, offering to pick up a 98.47 per cent stake in the company for the same amount it offered in the revised bid.
THE STORY SO FAR
- Bank of Baroda
files insolvency petition against Binani
Cement in the Kolkata bench of the NCLT
Feb 24, 2018
- Committee of Creditors
discusses resolution plans of all applicants
- Dalmia Bharat-led consortium emerges highest bidder with Rs 63.50-bn offer for Binani
- UltraTech Cement
raises bid to Rs 72.66 bn
- NCLT asks resolution professional to explain the process in selection of Dalmia Bharat; resolution professional alleges fraud, submits application in NCLT
votes in favour of Dalmia Bharat’s proposal; resolution professional issues letter of intent
- NCLT adjourns case till March 22; UltraTech Cement
negotiates agreement directly with Binani
Cement to pick up 98.43% stake for Rs 72.66 bn subject to termination of IBC
- Dalmia Bharat-led consortium deposits 10% of bid amount
- NCLT hears UltraTech Cement
Cement’s allegations against the resolution professional; orders resolution professional to respond by March 26
- After hearing Binani
Cement’s petition to terminate IBC
proceedings, NCLT asks CoC
to consider the proposal; suggests for out-of-court settlement