Lenders to sell Binani Cement? Braj Binani group turns to SC for relief
The reason behind the Braj Binani group flagship company to take this extraordinary step to knock at the door of the Supreme Court bypassing the National Company Law Tribunal (NCLT) is to prevent the sale of the cement company at a fraction of its perceived value, the company said after making the move
UltraTech of Aditya Birla Group and Dalmia Bharat are set for the final showdown at the Supreme Court over Binani Cement. The apex court is set to hear the case on Friday. The reason behind the Braj Binani group flagship company to take this extraordinary step to knock at the door of the Supreme Court bypassing the National Company Law Tribunal (NCLT) is to prevent the sale of the cement company at a fraction of its perceived value, the company said after making the move. “The Insolvency and Bankruptcy Code (IBC) is not designed to penalise a promoter or shareholder by prohibiting payment of 100% legitimate dues and become a mute spectator to the company being sold at a huge discount causing financial loss to financial lenders, trade operational creditors, public equity holders,” a Binani Industries spokesperson said.
A borrower always has the right to pay off all dues of all lenders and creditors and redeem the company from all mortgages and based on this principle, Binani has appealed to the lenders for a settlement outside the IBC process, he added. Putting forward the contrasting view, a Dalmia Bharat official said bypassing the resolution processing currently underway at the NCLT would undermine the IBC and would set a bad precedence.“The Supreme Court should not go against the IBC. Any order against the IBC will impact India’s ease-of-doing-business rank,” Dalmia Bharat Group chief executive Officer Mahendra Singhi said.
Singhi had earlier told DNA Money that the Committee of Creditors, representing the lenders, are bound by legal contract with Dalmia Bharat after the company put in the highest bid of about Rs 6,700 crore.
But then Binani went for a pact with unsuccessful bidder UltraTech Cement to sell its 98.43% shareholding in the cement business for Rs 7,266 crore. This out-of-court pact might fructify if it gets the go-ahead from the Supreme Court.
By Sumit Moitra, DNA