Binani Cement has debts of around ~40 billion and it is one of the rare cases where banks are not taking a haircut
After a series of controversies, the consortium led by Dalmia Bharat
Cement has received final approval from the Committee of Creditors (CoC) of Binani Cement
to acquire the firm for Rs 67 billion, which includes a capital infusion of Rs 4 billion. This was despite Aditya Birla Group firm UltraTech Cement putting in a higher bid for Binani Cement.
The CoC voting, which went for over four hours on Wednesday, approved the resolution plan proposed by Dalmia Bharat
Cement, a source told Business Standard.
has debts of around Rs 40 billion and it is one of the rare cases where banks are not taking a haircut.
“Usually after the CoC voting, it takes two to three days to place the proposal before the NCLT
for final approval,” said the source quoted above.
"Expect a full-scale legal battle as the resolution professional ran a non-transparent process while ignoring our offer of Rs69 billion," an UltraTech executive said.
On Tuesday, the NCLT
asked Vijaykumar Iyer, the resolution professional for Binani Cement, to appear in person in the Tribunal to answer questions on the bidding process. UltraTech had moved the NCLT
against the resolution professional and Deloitte
for rejecting its bid for Binani Cement.
In its petition, UltraTech had alleged the resolution professional did not follow a transparent method in the bidding process and did not offer any details on what grounds its bid was not allowed.
spokesperson had earlier declined to comment on the issue citing client confidentiality. A Dalmia Bharat
spokesperson said the company would not comment on the Binani Cement
acquisition at present.
Interestingly, the promoter of Binani Cement, Binani Industries, has already challenged the resolution professional in the same tribunal, saying the RP has “personal interest” in undervaluing Binani Cement
and then selling it to his preferred bidder. According to Binani Industries, the value of Binani Cement
is Rs173 billion.
According to industry sources, the details of how the weights were assigned should be made public.
Interestingly, in the first round of bids for Binani Cement, JSW Cement
had emerged the highest bidder. But its offer was rejected and another round of bids was called. However, no details were given to the bidders on the process followed.