Afterwards, it submitted a revised bid, beating Dalmia Bharat’s offer after closure of the bidding window and also tried to finance
in an out-of-court settlement with the lenders, which the CoC refused. On April 16, it further revised its offer to Rs 79.60 billion.
The CoC, in turn has been ordered to consider the Aditya Birla Group
company’s revised bid while giving it scope for further modification and take a call bearing in mind the objective of the IBC. According to the ruling, the insolvency resolution process has to be completed by June 24.
During the course of numerous hearings, Jinan had observed that the objective of the IBC was maximisation of value.
The difference between UltraTech’s revised offer and that of the Dalmia Bharat-led consortium is Rs 10.22 billion.
Earlier, the legal counsel of the resolution professional as well as the CoC had argued that UltraTech’s revised bid could not be admitted for consideration as it would flout the internal process document of the CoC. This process document is based on guidelines issued by the Indian Banks’ Association and the Central Vigilance Commission.
The tribunal, however, had pointed out that the process document was not legally binding and asked what prevented the CoC from modifying the process document to accommodate a superior bid from UltraTech, which would pay off all lenders, including operational lenders, as well as clear all statutory dues.
“The CoC is also directed to reconsider the resolution plan of Rajputana Properties Pvt Ltd (RPPL) if the resolution applicant is willing to raise the offer above the offer of UltraTech,” Jinan said while reading out the order.
RPPL is the partnership firm formed by Dalmia Bharat
and Piramal-Bain Capital, which had previously been chosen by the CoC as the H1 bidder. Subsequently, the CoC had issued a letter of intent to RPPL, based on which it had made part of the requisite payment and moved the NCLT
for approval of the resolution plan. Dalmia Bharat
has a 50 per cent stake in this partnership firm.
“We are surprised by the order passed by the NCLT
today. The resolution professional and the CoC followed due process in approving the plan of RPPL. In our view, any revised offer from an unsuccessful resolution applicant outside the resolution process cannot become a basis of setting aside the decision of the CoC,” a Dalmia Bharat
Sources said the Dalmia Bharat-led consortium was discussing the possibility of challenging the tribunal’s order in the appellate authority in New Delhi but would take a call after it received the order “in totality”.
Sameer Kaji, corporate advisor to Binani Cement, said, “It is a very positive move in the evolving scenario of corporate insolvency resolution. While Dalmia Bharat consortium can raise its bid to match UltraTech Cement, it can also further revise its bid.”
Asked if this would lead to open bidding in the CoC or turn out to be an auction, he said, “There will be more clarity on this after a copy of the order is made available.”
Previously, based on the NCLT’s suggestion, the lenders had considered a UltraTech-backed financial proposal from the promoters of Binani Cement.
After the meeting, while the lenders termed the offer as “superior to the one the lenders have approved”, they had asked Binani Cement to obtain permission from the Supreme Court first for an out-of-court settlement. It implied termination of IBC proceedings against Binani Cement.
However, despite moving the apex court, Binani Cement withdrew its application after completion of the hearing.
Repeated calls to Iyer and a lead lender to Binani Cement went unanswered.
The stipulated 270-day period for Binani Cement’s insolvency resolution has expired on April 21. Jinan and Gosavi ordered that the period of litigation was excluded. Legally, unless a resolution plan is approved before the 270-day timeframe expires, the company will be liquidated.