While firm on its Rs 65.89 billion offer for takeover of the stressed assets of Binani Cement, the Dalmia Bharat Cement-led consortium, which previously won the bid for the acquisition, will move the NCLAT if the Kolkata bench of NCLT approves the offer from UltraTech Cement for the aforesaid acquisition.
It follows Tuesday's hearing of the Binani Cement case in NCLAT, where the Appellate Tribunal rejected Dalmia Bharat's plea to maintain status quo on the on-going tussle between itself and the Aditya Birla Group firm for the acquisition of Binani Cement.
A source suggested that since it is not revising its offer, the Committee of Creditors (CoC) is at will to select either their offer or the one from UltraTech, which is Rs 13.76 billion higher.
"As per the process, the resolution professional, with the CoC's recommendation, will place the favoured bid before the NCLT. If the NCLT decides to go ahead with the UltraTech bid without the NCLAT's approval, the Dalmia Cement-led consortium will challenge this decision and take it up before the NCLAT on July 10," the source said.
Already, this company, which is on an expansion spree, has filed a case before NCLAT appealing to stay NCLT's order which admitted UltraTech’s bid and indirectly asked Dalmia Bharat to up its offer. Although the Appellate Tribunal declined to stay NCLT’s order, it had listed the case for hearing. The case has been adjourned till July 10.
As per this source, even if the lenders of Binani Cement and UltraTech sign any deal and any cash transfer happens, the NCLAT has the power to reverse the process.
On the other hand, the NCLT has ordered June 24 as the deadline for the resolution process failing to which Binani Cement will face liquidation as per IBC. However, lawyers involved in the case have suggested that an extension by the Tribunal may be granted.
"It follows from today's discussion at NCLAT that the CoC is at will to go ahead with the resolution process and it can’t be stalled," a source close to UltraTech said.
After the CoC met last Friday to discuss the proposal from UltraTech, it gave Dalmia Bharat time till 12 noon on May 23 to match the offer from UltraTech.
Sources among the lenders said that in case Dalmia Bharat doesn’t up its offer, the CoC may accept the plan from UltraTech and place it before the NCLT for approval.
“The NCLT’s directive to the CoC is clear from its order – it has to consider both the proposals while keep in mind the spirit of the IBC and then take a call”, one of the financial lenders to Binani Cement said.
As per the Tribunal, the spirit and objective of IBC is maximisation of value.
A second lender opined that in face of no revision of bid by Dalmia Bharat, the CoC will approve the offer from UltraTech.
On the other hand, even though Dalmia Bharat alleged that UltraTech is not eligible to bid for Binani Cement as it flouted Section 29A of the IBC, the CoC gave a clean-chit to UltraTech in that meeting and considered their bid.
Dalmia Bharat’s inflexibility to revise its offer primarily springs from its contention that its selection was as per the law under the IBC framework and the cost of acquisition of Binani Cement for any amount higher than their offer isn’t feasible.
“There is a limit to the cost of acquisition of the assets of Binani Cement. But above all, why should we revise our offer? Our selection as the H1 bidder was as per the IBC rules and regulations and so we don’t have any need to up our offer”, a source in Dalmia Bharat said.
Under the given circumstances, it is most likely that Dalmia Bharat will move the Supreme Court back again for the final outcome of this case of takeover under IBC.
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