Money & Banking

UltraTech loosens purse strings, offers ₹700 cr more for Binani

Suresh P Iyengar Mumbai | Updated on March 08, 2018 Published on March 08, 2018

Decides not to move NCLT against award of bid to Bharat Dalmia

 

UltraTech Cement, an Aditya Birla Group company, has agreed to increase its bid for Binani Cement’s stressed assets by ₹700 crore to a total of ₹7,250 crore. It has also agreed to pay the entire money up front to outbid Bharat Dalmia.

Last Monday, a consortium led by Bharat Dalmia had been declared the highest bidder by a resolution professional (RP) overseeing the sale of the stressed assets. The RP had also invited Bharat Dalmia to discuss a resolution plan.

Following this, UltraTech had moved the National Company Law Tribunal seeking a reassessment of the bids for Binani Cement, and had asked the RP to share the evaluation criteria.

On Thursday, Atul Daga, Chief Financial Officer, UltraTech Cement, told BusinessLine that the company had decided to raise its bid rather than moving the NCLT and delaying the process.

When asked if the lenders would accept the new bid, Daga said: “We have submitted our revised bid. It is for the lenders to decide what best suits them. They will accept it if they want to extract the maximum value for the stressed asset.”

Earlier, the resolution professional had said the winning bidder would be decided based on a scoring methodology. But there was no clarity on this, he said.

Binani Cement owes about ₹4,000 crore to lenders and ₹2,000 crore to operational creditors. The company has a production capacity of 11 million tonnes per annum (mtpa) and had received bids from Ramco Cement, Heidelberg, stockbroker Rakesh Jhunjhunwala and JSW Cement, besides Dalmia-Bain and UltraTech.

Twists and turns

JSW Cement was announced as the winner in the first round, but the resolution professional had decided to call for rebidding due to the detection of a fresh liability.

Bharat Dalmia, along with Bain Capital’s India Resurgent Fund and Piramal Enterprises, had bid ₹6,700 crore, offering ₹6,300 crore to the lenders and another ₹400 crore as capital infusion.

Interestingly, the Competition Commission of India has already approved the proposed acquisition of Binani Cement by Rajputana Properties, a subsidiary of Dalmia Bharat Cement.

This was the first transaction to be notified to the CCI involving the acquisition of a corporate debtor under the insolvency code.

Published on March 08, 2018
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