Loan Defaulter Binani Cements Gets a Buyer, UltraTech Cement Offers to Acquire 98.43% Stake
The move comes days after rival Dalmia Cement said its Rs 6,350 crore bid to buy Binani Cements Ltd (BCL) has been accepted by the lenders
In a surprise turn of events, Aditya Birla Group's Ultratech Cement on Monday made an offer to take over loan defaulter Binani Cements for Rs 7,266 crore, posing a challenge to the nascent bankruptcy resolution process. According to a PTI report, Ultratech gave a "comfort letter" to Binani Cements offering Rs 7,266 crore for a 98.43 per cent stake, which will bail the crippled company out. The offer is contingent on the resolution case moving out of the NCLT. Both the companies separately moved the National Company Law Tribunal in Kolkata overseeing the debt resolution since July last year.
The move comes days after rival Dalmia Cement said its Rs 6,350 crore bid to buy Binani Cements Ltd (BCL) has been accepted by the lenders. Besides offering Rs 6,350 crore, Dalmia had also offered 20 per cent equity in Binani to the lenders.
Reportedly, according to a statement, by UltraTech, it will pay Rs 72.66 billion to lenders of Binani Cement and free up bank guarantees worth Rs 10 billion. Ultratech and Binani today alleged lack of transparency in the bidding process, and of being kept out of critical discussions by the resolution professional. Speaking to reporters at a Binani group office in the financial capital late, its corporate strategy advisor Sameer Kaji said that "maximising value" is the key objective of the bankruptcy process and claimed that this deal addresses that the best. He, however, declined to comment on 20 per cent stake offered by Dalmia to lenders. Kaji also said Binani has not contacted the lenders since the fresh turn of events.
Ultratech Cement is the leader in the cement industry with a 92.5 million tonne installed annual capacity, and the fourth largest in the world excluding China. Binani Cement, on the other hand, has an installed capacity of just 6.25 million tonne. At the first round of bidding there were four suitors and JSW Cement had emerged as the highest bidder.
(With additional inputs from PTI)
(The above story first appeared on LatestLY on Mar 20, 2018 02:28 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).