All secured creditors of bankrupt Binani Cement (BCL) received their dues on Tuesday, a day after the Supreme Court allowed UltraTech Cement to acquire the cement firm under the corporate insolvency resolution process (CIRP). Financial creditors to Binani Cement include State Bank of India, Edelweiss Asset Reconstruction Company, IDBI Bank, Canara Bank, Bank of Baroda, Bank of India and EXIM Bank, among others.
BCL, which had been a subsidiary of Binani Industries, became a wholly-owned subsidiary of UltraTech Cement with effect from Tuesday. In terms of the company’s resolution plan approved by the National Company Law Appellate Tribunal (NCLAT), the board of BCL has been re-constituted, the Aditya Birla Group unit informed in a stock exchange filing.
On Monday, a Supreme Court bench of Justices RF Nariman and Navin Sinha upheld the NCLAT’s order, which had allowed UltraTech Cement to acquire Binani Cement by approving its revised Rs 7,950.34 crore bid. However, the cement major’s outgo to acquire the bankrupt firm will be higher since the company would continue to pay the financial creditors’ interest.
The committee of creditors (CoC) of Binani Cement had voted overwhelmingly in favour of Ultratech’s Rs 7,960 crore bid on May 28. The NCLAT order in the case had rejected Dalmia Bharat group company Rajputana Properties’ bid as it was “discriminatory” against some financial creditors. The appellate tribunal had said the RPPL’s resolution plan discriminated between some of the financial creditors which are equally situated and not balanced the other stakeholder, such as operational creditors.
“Therefore, the adjudicating authority (NCLT Kolkata bench) has rightly held the resolution plan submitted by RRPL to be discriminatory,” it noted. The NCLAT observed that both – RPPL and UltraTech – had submitted their plan on February 12, 2018 and subsequently RPPL had revised its plan on March 7 and UltraTech on March 8, much before the CoC voting date of March 14.