Binani lenders decide to back UltraTech if it gets SC go-ahead

Binani Industries to move Supreme Court with Rs 7,618 crore offer

Binani Industries to move Supreme Court with Rs 7,618 crore offer

With backing from lenders of Binani Cement rival bidder Binani Industries (BIL) also on Monday moved the Supreme Court seeking permission for an out-of-court settlement with banks to end insolvency proceedings initiated against its subsidiary Binani Cement. It may be recalled that UltraTech Cement had moved the court asking lenders to reconsider its offer although 99.5% of them had voted in favour of Dalmia Bharat.

"The IBC is not created 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. Binani Industries has reportedly agreed to pay the interest up to the date when the insolvency proceedings kicked-off. Kumar Mangalam Birla's UltraTech has since challenged the decision of the resolution professional and the committee of creditors and has "revised" its offer upwards to Rs 7,266 crore. The lenders are learnt to have accepted Binani Industries' offer, subject to a higher adjudicating authority approving it.

The National Company Law Appellate Tribunal (NCLAT) had, in its order on April 5, directed the Kolkata Bench of NCLT to consider the Binani Cement case only under the provisions of the Insolvency and Bankruptcy Code (IBC).

In March, UltraTech had said in a statement that Binani Industries had approached it for arranging funds to pay-off the lenders. Operational creditors have been supporting this UltraTech-backed Binani offer as it covers entire claim. It has said the money will be credited to the account within three days of the deal being approved by the Supreme Court. With Ultratech's bid getting approval from the Competition Commission of India two weeks ago - which it claimed was the reason why it was not rated as the highest bidder - things are certainly looking positive for this group.

Mr Tibrewal said that the Dalmia Bharat has come to the conclusion that 98 per cent of the OCs or trade creditors have dues of under Rs 1 crore for whom the company offers full payment. According to the daily, the consortium is also expected to move the apex court on the grounds that the move by the lenders is illegal as they had won the bid.

Binani Cement owes about INR 7,000 crore to both financial and operational creditors.

During the ongoing insolvency proceedings of Binani Cement, Resolution Professional (RP) Vijaykumar V. Iyer submitted the resolution plan of Dalmia Bharat-controlled Rajputana Properties before the bench as the "highest bidder" to take over the debt-laden company.

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