Termination of insolvency proceedings: Binani withdraws plea in Supreme Court

Binani Industries Ltd withdrew its appeal against an NCLAT order in the Supreme Court after it refused to allow an out of court settlement for its debt-ridden subsidiary Binani Cement Ltd (BCL).

A bench comprising justices A K Goel and R F Nariman was told by senior advocate Harish Salve, appearing for Binani, that there was nothing in the Insolvency and Bankruptcy Code, 2016, which prevented the company from entering a settlement and securing itself.

The bench, however, observed, “Why should we interfere at this stage? Binani plea appears to be ‘put up’ by Ultratech, the failed bidder.”

The lawyer appearing for Ultratech said there were no grounds to disqualify them from making the offer. Binani Industries Ltd (BIL) has received an offer from the Aditya Birla group firm UltraTech to transfer its 98.43 per cent stake in BCL for Rs 7,266 crore.

However, the deal was subject to ending the insolvency proceedings against BCL, whose Credit of Creditors (CoC) led by Bank of Baroda has approved Rs 6,350 crore bid from Dalmia Bharat group’s wholly-owned subsidiary, Rajputana Properties Ltd.

The National Company Law Appellate Tribunal (NCLAT) had in March granted “liberty to the parties to reach settlement”.

Dalmia Bharat group’s offer to pay Rs 6,350 crore for Binani Cement was selected by CoC of the company. However, later, UltraTech Cement entered into an agreement with BIL to buy 98.43 per cent stake in BCL. It had also agreed to issue a comfort letter to provide Rs 7,266 crore to Binani Industries Ltd for ending insolvency proceedings against Binani Cement.