Resolutions OfBinani Cement, Essar Steel Within Rules
The Insolvency and Bankruptcy Board of India (IBBI) has said that it did not find any contradiction in approvals of resolution for Essar Steel and Binani Cement in the context of “value maximisation”. The Ahmedabad bench of National Company Law Tribunal (NLCT) approved the ArcelorMittal’sRs. 42,000 crore resolution plan, rejecting the Ruias settlement offer of Rs. 54,389 crore.
Recently, in the case of Binani Cement, the Kolkata bench of NCLT approved the resolution plan of UltraTech Cement which was higher than what the Dalmia Bharat group had to offer even after the Committee of Creditors (CoC) earlier selected them as the higher bidder.
The case debated a lot on value maximisation in a corporate resolution plan.
“In Binani, the one which was approved was within the rules. The one which was rejected was because it was not balancing the interest of the stakeholders,” IBBI chairman M S Sahoo told when asked about resolutions of Essar Steel and Binani Cement.
“Value maximisation is the assets of the debtor and not of the creditor. This is not a recovery by finance institutes but value maximisation is for the corporate debtor,” he said.
If the CoC has approved “within the process”, then it is valid for both Binani as well as ArcelorMittal.
The Committee of Creditors (CoC) is supreme in commercial matters but that supremacy has to be within the framework of law, he pointed out.