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Dalmia consortium set to acquire insolvent Binani Cement

08 March 2018

UltraTech Cement is reported to have moved the National Company Law Tribunal (NCLT) seeking a reassessment of bids for Binani Cement after Bharat Dalmia emerged as the highest bidder with a Rs6,700 crore offer.

A consortium of Bharat Dalmia, Bain Capital's India Resurgent Fund and Piramal Enterprises is learnt to have placed a winning bid of Rs6,700 crore for Binani Cement, which is under insolvency proceedings at the National Company Law Tribunal.

The consortium had agreed to invest around Rs6,700-crore in the stressed cement company, Binani Cement, offering Rs6,300 crore to the lenders and another Rs400 crore as capital infusion for running the company.

The amount includes upfront cash payments, as well as an offer of close to 20-per cent stake in Binani to lenders.

Binani Cement, which was brought under the National Company Law Tribunal (NCLT) in July 2017 for debt resolution under the Insolvency and Bankruptcy Code, owes around Rs6,500 crore to its lenders, according to a Mint report of 28 February.

Meanwhile, the Competition Commission of India (CCI) on Wednesday unconditionally approved the proposed acquisition of Binani Cement Ltd by Rajputana Properties, a subsidiary of Dalmia Bharat Cement Ltd.

Binani Cement is currently undergoing a corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC).

This is the first transaction to be notified to the CCI involving the acquisition of a corporate debtor under the insolvency code. The commission has cleared the transaction within 13 working days after it was filed.

Dalmia Bharat Cement Ltd and UltraTech Cement Ltd, the top two contenders for Binani Cement, had submitted nearly identical bids of roughly around Rs6,000 crore each, according to the Mint report, which quoted two people close to the bidding process as saying.

Binani Cement is part of the Braj Binani Group and is a subsidiary of Binani Industries Ltd (BIL). BIL is the holding company of the group, and has presence in five key businesses areas, including cement, fibreglass, infrastructure and energy.

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