Implementation of India’s much-vaunted bankruptcy code continues to be in doldrums with corporates winning contrasting court orders. On Wednesday, the National Company Law Tribunal’s Kolkata Bench ordered the Committee of Creditors (CoC) of Binani Cement to consider the revised offer submitted by UltraTech Cement Ltd on March 8, 2018—after the deadline set under the Insolvency and Bankruptcy Code, 2016 (IBC).
The bench ordered the resolution professional appointed by CoC to accept the revised order within three days. The order also offered Dalmia Bharat Group-led Rajputana Properties (RPPL), the original highest bidder, an opportunity to match UltraTech’s bid. The court also ordered to extend the deadline for the resolution process to June 24—to account for the time spent in litigation. The 270 days set by IBC to resolve the process expired at the end of April.
“It is made clear that if both resolution participants are willing to participate in the bidding process, CoC is expected to allow both resolution applicants in the bidding process, and which is best for the revival of the corporate debtor is to be decided by the CoC,” Justice Jinan K.R. and Justice Madan B. Gosavi said in their order.
Lawyers representing UltraTech Cement cited another bankruptcy case, of Bhushan Power & Steel, wherein NCLT’s Principal Bench has ordered the consideration of Liberty House UK’s bid, despite it being submitted after the deadline, as a precedence.
The latest court order, however, is only pertaining to UltraTech’s bid made on March 8 under the IBC process. It does not ask the CoC to consider UltraTech’s out-of-court approach to Binani Cement’s promoters. On March 21, Aditya Birla Group’s UltraTech Cement offered Binani Cement’s promoters Rs 7,266 crore for acquiring the company outside the IBC process.
A Dalmia Bharat Group spokesperson said the company is “surprised by the order” and will “take all the appropriate steps required”. “The RP (resolution professional) and CoC followed the due process of law in approving the plan of RPPL in which no flaw has been found. 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. We have strong conviction that we have followed the law as per the due process and believe that we will eventually succeed,” the spokesperson said in a statement. The company did not clarify if it will approach the National Company Law Appellate Tribunal challenging Wednesday’s order, or if it will match UltraTech’s bid.
The Dalmia Bharat Group-led consortium, which also includes Piramal Enterprises and Bain Capital, had bid Rs 6,750 crore for Binani Cement and was declared the highest bidder by the CoC on March 14. The consortium had also submitted a 10% bank guarantee to begin the process of takeover of Binani Cement.
(For a detailed look at the problems relating to the Insolvency and Bankruptcy Code read the May 2018 issue of Fortune India, now on stands)
