Binani Cement lenders back UltraTech’s offer
Binani acquisition will be subject to Supreme Court ruling
MUMBAI: UltraTech Cement Ltd’s ₹7,950 crore bid to acquire Binani Cement Ltd has received nearunanimous backing from lenders to the distressed building material maker even as a legal battle reached the country’s top court, two people aware of the development said.
Binani Cement’s committee of creditors (CoC) voted in person to approve UltraTech’s bid at the meeting on Monday, the people said, requesting anonymity.
“UltraTech is being supported almost unanimously by the lenders,” one of the people, a banker, said. “The Supreme Court has not put a stay on the process; so the direction is clear.”
The acquisition of Binani Cement will, however, be subject to the Supreme Court’s ruling, with a Dalmia Bharat Ltd-led consortium challenging the May 15 order of the National Company Law Appellate Tribunal that allowed lenders to consider UltraTech’s revised offer. The offer was submitted after lenders selected Dalmia as the top bidder.
The Supreme Court is likely to hear the appeal by Dalmia Bharat next week. The consortium is challenging UltraTech’s eligibility to bid under the Insolvency and Bankruptcy Code, which disallows defaulting promoters from being resolution applicants. Dalmia’s contention is that UltraTech is working in concert with Binani Industries Ltd, the parent of Binani Cement, and is hence a defaulter.
Piramal Enterprises and Bain Capital are the other members of the Dalmia Bharat-led consortium.
“The process has been laid out and has to be followed. The (value) maximization is happening beyond the process, which is not correct. It is a lacuna in the law and is being decided by NCLT (National Company Law Tribunal) and SC,” Ajay Piramal, chairman of Piramal Enterprises, said.
Dalmia Bharat has offered lenders ₹6,350 crore to take over Binani. UltraTech, which had originally bid lower, later raised its bid by more than ₹1,000 crore. Binani Cement’s lenders allowed Dalmia to match UltraTech’s bid, but Dalmia chose to challenge the process in court.