UltraTech Cement Ltd., vying with the Dalmia Bharat Group to buy Binani Cement Ltd., today entered into an agreement with Binani Industries Ltd. to buy its cement arm for Rs 7,266 crore, even as the insolvency process continues.
It concluded a commercial understanding with Binani Industries Ltd. to buy 98.47 percent of its cement arm subject to termination of insolvency process, UltraTech said in a stock exchange notification. Binani Industries, in a separate filing, said its board has decided to move the National Company Law Tribunal to come out of the insolvency process by repaying lenders.
Aditya Birla Group-promoted UltraTech will issue a letter of comfort for its increased bid to the cement maker's lenders for termination of insolvency proceedings at the Kolkata bench of the NCLT, according to its exchange filing.
Billionaire Kumar Mangalam Birla-led UltraTech had increased its offer for Binani Cement after Dalmia Bharat emerged as the highest bidder. The committee of creditors, however, on March 15 approved the rival bid by the investor group led by Dalmia Bharat and backed by Bain Capital. UltraTech then approached the NCLT, which was scheduled to hear the matter today.
The Dalmia Bharat consortium had bid about Rs 6,350 crore ($978 million) and offered close to a 20 percent stake in Binani Cement to its lenders, people with knowledge of the matter said last month. 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 exchange filing.
Binani Cement is one of the few assets with a sizeable capacity available in land-locked north. It also has a well-established brand and markets its product in Rajasthan and neighbouring Gujarat, Maharashtra and cement-deficit states of Uttar Pradesh, Bihar, Punjab, Haryana and Delhi.
Also Read: In The Binani Cement's Insolvency Case Has The CCI Muddied The Waters For Approval Filings?
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