Creditors to decide next week on bids for Binani Cement

UltraTech Cement’s new offer of ~69 billion for Binani Cement, to try and match the ~67 billion joint bid from Dalmia Bharat Cement and Bain Capital’s Resurgent India Fund, is to be placed next week before the Committee of Creditors (CoC). Binani is insolvent and had been taken to the National Company Law Tribunal (NCLT). The CoC has to first approve a winning bid.

Earlier, it was reported, the resolution put forward by Dalmia Bharat and Resurgent India got the CoC approval. The Competition Commission of India had also given approval to the acquisition of Binani (the largest subsidiary of Binani Industries) by these two firms. The CoC needs to take up Dalmia Bharat Cement’s resolution plan for voting.

Previously, however, UltraTech Cement had moved NCLT, questioning the process of selecting the bidder, alleging it wasn’t explained why its bid was rejected. Also, pegging its asset valuation at ~173 billion, Binani Industries, the promoter, had alleged assets of its cement brand had been undervalued during the resolution. It had moved the NCLT in its own capacity.

In July 2017, Bank of Baroda took the ~38.84-billion debt-laden Binani Cement to NCLT, after it failed to repay a loan of about ~970 million.

The case was admitted and, subsequently, Vijaykumar Iyer was appointed as the resolution professional. JSW Cement initially led the bid but its plan was rejected and a fresh bidding process was announced, from which the Dalmia BharatResurgent India Fund consortium emerged as the preferred bidder.

If the deal is finally endorsed by NCLT, it will be the third such buy by Dalmia Bharat Cement, the others being bankrupt Murli Cement and Kalyanpur Cement.