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First Big 100 Per Cent Recovery Under IBC? UltraTech’s Rs 7,950 Crore Binani Cement Bid Accepted By NCLAT
Swarajya Staff
Nov 15, 2018, 11:29 AM | Updated 11:29 AM IST
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The revised bid offer by UltraTech Cement for debt ridden Binani cement has been accepted by NCLAT, as reported by The Hindu. The final bid amount of Rs 7,950 crore is expected to ensure a full recovery of claims of all the stakeholders of the debt-ridden company as the company reportedly owes around Rs 7,000 crore to various creditors.
This as per business journalist Geetu Moza is the first big resolution under the IBC (Insolvency and Bankruptcy Code of India) which resulted in 100 per cent recovery of debts:
Binani Cement Resolution Big Positive for #Banks
— Geetu Moza (@Geetu_Moza) November 14, 2018
First Big Resolution With 100% Recovery
PSU Banks To Benefit The Most Post NCLAT Nod For Ultratech Bid
Bank Exposure:
BoB Rs 427 Cr
Canara Bk Rs 370 Cr
IDBI Rs 336 Cr@Anku1912
Besides reportedly ensuring a 100 per cent recover, the biggest beneficiaries of this bid are said to be PSU banks.
NCLAT (National Company Law Appellate Tribunal), the appeals court established under NDA government’s flagship legislation, the IBC, rejected a rival bid of Rs 6.932 crore from Dalmia Group-led Rajputana Properties Pvt. Limited.
It had reasoned that, “The Rajputana Properties Private Limited, in its resolution plan, has discriminated some of the financial creditors who are equally situated and not balanced the other stakeholders such as operational creditors,”.
Following this, UltraTech came up with a revised bid of Rs 7,950 crore.
In October 2018, the Committee of Creditors (CoC) overseeing the resolution of Essar Steel, approved ArcelorMittal’s bid of Rs. 42,000 crores. However, unexpected delays beyond the stimulated the 270-day period resulted in losses to the tune of Rs 4,000 crores for the banks as part of the interest forgone on the principal.
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