UltraTech offers Rs 7,990 crore for Binani Cement, raises bid by Rs 700 crore

Days after Supreme Court refused to allow out-of-court deal for debt-laden Binani Industries, Aditya Birla Group’s UltraTech Cement has sweetened its offer by another Rs 700 crore to Rs 7,990 crore. The difference in offer between the Dalmia Bharat-led consortium and UltraTech has now widened to Rs 1,290 crore.

According to a report in The Economic Times, UltraTech pitched the offer to the resolution professional on Saturday evening and contended that the new offer will cover the interest that lenders had to forgo from the day Binani Cement was admitted to bankruptcy court.

Earlier, Dalmia Bharat Cement had written to the Central Vigilance Commission’s (CVC) asking for a probe in the matter. Dalmia Bharat had said that the bidding process did not allow submission of revised bids. The move had infuriated some of the lenders which have large exposure to Binani Cement.

The letter added that apart from ‘violating CVC guidelines’ and ‘shaking public confidence’ in the bankruptcy code, the settlement between Binani and the lenders will also “send a wrong message to the international investing community, whose participation in resolving mounting NPAs of the banking sector is vitally important and in public interest”.

Last week, Binani Industries (BIL) had moved the apex court with an appeal to redeem the pledge of its assets Binani Cement from its lenders. It had also deposited a sum of Rs 750 crore to show its commitment, along with a bank guarantee for the remaining amount of the total offer of Rs 7,266 crore.

UltraTech’s board had agreed to issue a ‘comfort letter’ to provide the above-mentioned amount in return for 98.43 per cent stake in Binani Cement provided the company came out of insolvency proceedings. Interestingly, this offer came after the latter’s Committee of Creditors (CoC) had voted in favour of the resolution plan submitted by the Dalmia Bharat-Bain Piramal Resurgence Fund consortium.

The offer from the Aditya Birla Group company was certainly fatter than Dalmia Bharat’s winning bid of around Rs 6,500 crore. So, Binani Cement’s CoC had decided to conditionally back the deal between BIL and UltraTech, subject to the Supreme Court’s nod.

A section of beleaguered Binani Cement’s Operational Creditors (OCs) may plead before the Kolkata chapter of the adjudicating authority for rebidding, reported PTI. Creditors may also press for a forensic audit of resolution process and the removal of resolution professional.

The Kolkata bench of the Nattional Company Law Tribunal (NCLT) hearing is scheduled today after Binani withdrew their plea in Supreme Court for an out-of-court settlement.

“Now, the only hope for the OCs is for the NCLT to declare a fresh bidding so that the interests of all stakeholders are protected. We will plead for it,” spokesperson of OCs forum Hitesh Bindal told PTI.

“The OCs will lose about Rs 400 crore worth of claims from Binani Cements if Dalmia Bharat offer is approved. In turn, several banks will lose money who had lend us in case our claims are not recovered, dragging many us to bankruptcy,” Bindal claimed.

OCs are supporting the revised UltraTech bid which is not considered for resolution so far.

The Rs 7,618 crore Binani-UltarTech offer promises to repay the claims without any haircut to all secured and unsecured claims. This in turn will protect the amount (Rs 400 crore) adding to NPA lists of the banks, Bindal said.businesstoday

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