‘We will turn around Binani in 1-2 years’

As Dalmia Bharat and UltraTech Cement continue to battle for Binani Cement in the Kolkata Bench of the NCLT, Dalmia Bharat group CEO MAHENDRA SINGHI speaks to Avishek Rakshit about the importance of Binani Cement in his company’s scheme of things. Edited excerpts. With 14 cases of ligation in the Kolkata Bench of the NCLT, the Binani Cement takeover plan is turning out to be a long-drawn affair. Do you think the matter will reach the Supreme Court?

The next date of hearing in the NCLT is April 2 and it will take a week or more for the resolution plan to be approved. Then it is up to litigators to take the case further to higher courts or not. The position of law is pretty clear here – cases that have been referred under the Insolvency and Bankruptcy Code (IBC), cannot be taken out of the purview of the NCLT and settled outside the scope of IBC. Even if the case is taken to the Supreme Court, I think it will be resolved soon. Our case rests on an extremely strong legal position.

Why is the Binani Cement takeover so important for you?

The acquisition of Binani Cement will give us an exposure to the entire north Indian market, including Gujarat, and will help Dalmia Bharat emerge as a pan-Indian cement manufacturer. Currently, our consolidated capacity stands at 27 million tonnes (mt). The acquisition of Murli Cement increased it by 3 mt and Kalyanpur Cement by another 1 mt. Now with the acquisition of Binani Cement, our total capacity will increase to 42 mt and will also give us an exposure to markets in China and Dubai.

The Binani Cement acquisition will give you an international exposure and you have not been operating in the global space. What plans do you have for international operations?

At present, we do not have an international plan in place, but once we take possession of the firm, we will take a call on how best to use these assets.

How do you plan to finance the take over of Binani Cement?

We have formed a partnership with Piramal- Bain Capital, where both of us have an equal holding. For the takeover, both of us will take up equal equity and the rest of the finance will be arranged from banks. It will be an appropriate mix of debt and equity. This plan has been approved by the Committee of the Creditors.

By when do you think you can turn around Binani Cement?

In a matter of one or two years at most. Our performance parameters are one of the best in the industry. Ebitda per tonne is one of the highest among peers, and we have a good track record to turning around stressed assets.

Operational creditors have alleged that their interests have not been looked into in your resolution plan. What is your response?

Based on the information we got from the Committee of Creditors and the resolution professional, we have placed our bid. We were able to satisfy most of the operating creditors and because of this our plan was approved. In any stressed assets sale, everyone cannot be satisfied. The revival of the stressed asset will create many opportunities for operating creditors to grow their business.