UltraTech gets CCI nod for Binani Cement bid
29 Mar 2018
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The Competition Commission of India has granted approval for UltraTech Cement’s $1.1-billion bid to acquire debt-laden Binani Cement Ltd, the Aditya Birla Group company said on Wednesday.
UltraTech, which is locked in a battle with Dalmia Bharat to acquire Binani Cement, had recently moved the National Company Law Tribunal, challenging the decision by Binani Cement’s creditors to select a joint venture of Dalmia Bharat and Bain-Piramal as the preferred buyer.
The bankruptcy resolution professionals for Binani Cement had earlier this month, advised its creditors to select a consortium of Dalmia Bharat and Bain-Piramal’s India Resurgence Fund as the preferred bidder for Binani Cement.
The Dalmia Bharat consortium had offered Rs6,300 crore for Binani Cement and the joint bid had also received CCI approval.
In a stock-exchange filing, UltraTech now contends that it had quoted a lower bid for Binani Cement because the resolution professional overseeing Binani Cement’s bids had raised apprehensions about the company obtaining the CCI approval.
“The CCI clearance validates UltraTech’s contention that they were wrongly and unjustifiably rated H2 instead of H1,” it said.
UltraTech had also, last week, entered into an arrangement with Binani Cement’s parent to provide Rs7,266 crore ($1.1 billion) to help it terminate the insolvency proceedings against the bankrupt unit (See: UltraTech makes fresh Rs7,266 offer; Binani appears to favour it).
UltraTech also alleged a lack of transparency in the auction process of Binani Cement.
Dalmia Bharat, however, said that the evaluation criteria for the bids were fair and transparent, adding that there is nothing to show that Binani’s creditors have not assessed the bids correctly.
Also, according to Dalmia Bharat, the CCI approval was a post-NCLT approval step and hence is a pre-requisite for bidders participating in the resolution process.
UltraTech is India’s largest cement maker while Dalmia Bharat is the fourth-largest.
Binani Cement, with a combined capacity of 11.25 million tonnes, has been undergoing corporate insolvency resolution proceedings since July 2017.
The cement maker has a domestic manufacturing capacity of about 6.25 million tonnes.
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