Hope for UltraTech-Binani deal alive post NCLT order

The NCLT order extending the timeline for consideration of an out-of-court settlement by the Committee of Creditors (CoC), has kept alive the hope for UltraTech Cement to take controlling stake in Binani Cement. “The decision by the NCLT today reaffirms the chances for an out-of-court settlement,” Sameer Kaji, Senior Advisor, Binani Cement said. A panel of two-member judges extended the deadline for the CoC of the bankrupt Binani Cement till April 9 to consider a proposal mooted by the Binani promoters for an out-of-court settlement and end NCLT proceedings. After the CoC declined to meet to consider the NCLT bench remarks for an out-of-court settlement without having any order, Dalmia Bharat group’s proposal was the front-runner for takeover. Sources close to Binani group said a detailed proposal will be submitted in a day or two to the CoC. When asked whether this may override the agreement CoC had made with Dalmia Bharat Cement led consortium, Dalmia camp officials said status does not change as the law does not allow out-of-court settlement under Insolvency and Bankruptcy Code. Dalmia Bharat Cement CEO Mahendra Singhi is of the view that once resolution plan is submitted to the NCLT, there is a binding contract with CoC and the party. Binani Cement had proposed to pay back all the secured and unsecured financial creditors and trade operational creditors, besides clearing all statutory dues on the condition that IBC proceedings against it have to be terminated. UltraTech Cement has agreed to pay the former Rs 7,266 crore to take 98.47 per cent stake in Binani Cement directly from the promoters. It is based on this agreement and a subsequent comfort letter that Binani Cement moved NCLT with its own proposal. But, these developments surfaced after CoC had issued a letter of intent to Dalmia Bharat Cement led consortium, which emerged as the H1 bidder and applied to NCLT for the final nod. The Operational Creditors were pinning hope on out-of-court settlement claiming better deal for their dues.