MUMBAI: In a major relief to banks struggling to cut their bad loans, the National Company Law Apellate Tribunal (NCLAT) on Wednesday approved the revised offer by Aditya Birla group company Ultra Tech Cement in its bid to acquire debt-laden Binani Cement. Ultra Tech had, in its revised offer, proposed to pay `7,950 crore all claims along with interest.
The NCLAT bench headed by chairperson Justice SJ Mukhopadhyaya rejected the resolution plan of Dalmia Bharat’s Rajputana Properties, which proposed to pay `6,932 crore against verified claims of `7289 crore. Calling Rajputana’s offer to take into account 100 per cent payment only to certain creditors as discriminatory, the bench said there cannot be any discrimination between the creditors.
The bench made it clear that I&B Code is a resolution and the purpose of resolution is for maximisation of value of assets of the corporate debtor, and is thereby for all creditors. “It is not maximisation of value for a ‘stakeholder’ or ‘a set of stakeholders’ such as creditors, and (is) to promote entrepreneurship, availability of credit and balance the interests. The first order objective is ‘resolution’. The second order objective is ‘maximisation of value of assets of the Corporate Debtor’ and the third order objective is ‘promoting entrepreneurship, availability of credit and balancing the interests’. This order of objective is sacrosanct,” it said.
The process of resolution had drawn on for long, starting with Bank of Baroda’s insolvency petition against Binani Cement and later bidding, offers, revised offers and appeals. The final round of appeals centred around Ultra Tech’s eligibility to come up with a revised offer after having been the second highest bidder in the initial phase.
Another front open
This order opens up another front in Essar Steel case, with 29 operational creditors moving NCLT, against order declaring ArcelorMittal’s bid as winner