MUMBAI: In a curious turn of events, Aditya Birla Group’s UltraTech Cement Ltd signed a pact to buy 98 per cent stake in Binani Cement for Rs 7,266 crore.The acquisition is subject to clearance from the National Corporate Law Tribunal (NCLT), as Binani Cement is currently undergoing the insolvency process.
On Monday, the UltraTech board agreed to issue the letter of comfort to creditors’ panel regarding its resolution plan submitted at the NCLT Kolkata bench to buy Binani Cement, the company said in a disclosure with the bourses. A commercial understanding with Binani Industries Ltd to buy 98.47 per cent of its cement arm subject to termination of insolvency process was signed, it said.
It may be noted that UltraTech moved the NCLT alleging that the resolution professional dismissed its bid for Binani Cement earlier without disclosing the reasons for the same. It also alleged that the resolution process was non-transparent. UltraTech had increased its offer for Binani Cement after the Dalmia Bharat consortium emerged as the highest bidder. Dalmia Bharat proposed to make the Binani Cement investment through a 50-50 joint venture with India Resurgence Fund, backed by Bain Capital Credit and Piramal Enterprises Ltd., according to an exchange filing.
The committee of creditors, on March 15, approved Dalmia’s bid for about Rs 6,350 crore and offered close to a 20 per cent stake in Binani Cement to lenders in return. Last week, UltraTech increased its bid to Rs 6,900 crore, besides offering to pay 100 per cent of secured and unsecured lenders’ debt, but it didn’t get favourable response, compelling it to move the NCLT.
Binani Cement has sizeable assets in land-locked north, and markets its products in Rajasthan and Gujarat, Maharashtra and cement-deficit states of Uttar Pradesh, Bihar, Punjab, Haryana and Delhi.