By Anisha Nayar Dhawan

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Faced with the prospect of having to pay more for Binani Cement after nearly pocketing it for much less, Dalmia Bharat is quite miffed. Now, it has tried all the tricks in the book to scuttle the process where a higher bidder walks away with the prize. They approached the appellate authority NCLAT to stay the order passed by NCLT Kolkata on May 2, asking the Resolution Professional (RP) and creditors to consider Ultratech’s revised bid for Binani Cement. NCLAT refused to give a stay to the resolution process. Dalmia Bharat then approached the Supreme Court, which too has today, refused to interfere in the matter.

ADVANTAGE ULTRATECH

Ultratech's revised bid is believed to be close to Rs 7,900 cr much higher than Dalmia Bharat's Rs 6,350 cr plus 20% stake for creditors for Binani Cement. On May 2, NCLT Kolkata had asked the Committee of Creditors (CoC) to consider Ultratech's revised offer in 3 days. It also gave a chance to Dalmia Bharat to match Ultratech's bid, and if required all parties-banks, Ultratech and Dalmia Bharat could meet across the table and have a form of open bidding for Binani Cement.

RP CANCELS LENDERS MEET

Ultratech submitted its revised offer within the timeline set by the Kolkata NCLT order. The resolution professional, Vijaykumar Iyer cancelled the meeting of the CoC at the 11th hour, after Dalmia Bharat shot off a letter raising objections to Ultratech's bid, saying that the latter had become ineligible to bid after acting in concert with Binani Industries to exit the insolvency process. In March Ultratech signed a deal with Binani Industries to buy 98.4% stake in Binani Cement paying Rs 7200 cr which would be used to repay lenders provided troubled Cement maker would exit NCLT.

HOW DID ULTRATECH BECOME INELIGIBLE?

Dalmia Bharat claims that Binani Industries and Ultratech have been acting jointly and in concert. Because of this Ultratech became ineligible under section 29 of the IBC which prohibits promoters from bidding for companies undergoing insolvency resolution until they clear their past dues. Dalmia Bharat claims that mere disassociation with Binani Industries will not cure Ultratech of its disqualification.

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PROCESS VS SPIRIT OF IBC

Recent rulings by NCLT in similar insolvency cases like Bhushan Steel and Essar Steel have hauled up the RPs questioning their conduct whether it is incorrect valuation of assets, or barring bids/bidders or being too stringent with the letter and word of the law rather than the spirit of the law. This has led to delays with not one of the 12 cases referred by RBI to NCLT seeing resolution. The pile of bad loans has not eased much, with 2.5 lakh crore of bad debts still hoping for resolution, long after the 270 day deadline is over.

Experts believe the new law, the Insolvency and Bankruptcy Code is still work in progress, amendments have been brought and more are being planned. For banks, who are hoping for a timebound resolution so that the monster of bad loans dies fast, it seems that this is more of a mirage and not the elusive oasis in the dessert.