BackBuyers eye Murli Industries’ cement and paper assets
Ambuja, Dalmia Bharat among bidders for debt-laden Murli Industries' cement unit; West Coast Paper Mills, JK Paper express interest in paper division
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Murli Industries Ltd, which is facing bankruptcy proceedings at the National Company Law Tribunal (NCLT), has drawn interest from several bidders for its cement and paper assets, according to two people directly aware of the proceedings.
Nagpur-based Murli Industries’ cement division has received bids from Ambuja Cements Ltd, Shree Cement Ltd, Dalmia Bharat Ltd and Sagar Cements Ltd, the two people said on condition of anonymity. The paper unit, which produces newsprint, writing and printing paper, has drawn interest from West Coast Paper Mills Ltd and JK Paper Ltd, the people said.
Spokespersons for Dalmia Bharat and Sagar Cements declined to comment, while emails sent to Shree Cement and Ambuja Cements remained unanswered. A spokesperson for JK Paper declined to comment and an email sent to West Coast Paper Mills remained unanswered at the time of going to press.
A spokesperson for Edelweiss Asset Reconstruction Co. (ARC), Murli Industries’ largest lender, said “bids have been invited by the resolution professional (RP) and we understand that there is good interest in the asset".
Lenders had approached NCLT against the firm in April, following which the tribunal had appointed a resolution professional. Consulting firm Deloitte was hired to assist the resolution professional in the resolution process.
There is no reserve price on the assets but bids are expected at upwards of Rs500 crore, according to the people cited earlier. “The deadline for the bids expires on 18 August, following which the company’s committee of creditors will meet to decide the next course of action," said one of the two people.
Promoted by the Maloo family, Murli Industries owes close to Rs1,800 crore to a group of lenders led by Edelweiss ARC, which owns 60% of the debt. Bank of Baroda owns 25% of the debt, while the rest is owned by smaller lenders.
Murli Industries began operations with a solvent extraction plant in the early 1990s and diversified into paper products in 1997 after going public in 1993. The group entered the cement business in 2010 and has an integrated cement manufacturing facility with a capacity of 3 million tonnes per annum and a clinker unit with a capacity of 2 million tonnes per annum.
The group’s paper business comprises newsprint, duplex board and printing paper units, with an overall capacity of 745 tonnes per day. The company’s debt piled up following its entry into the cement business owing to cash flow mismatches, said the first of the people cited earlier, adding that the firm has been in talks to sell its assets for the past four years. “But the talks never culminated in a deal owing to differences in valuation, cancellation of mining leases among other reasons," this person said.
The Nagpur bench of the debt recovery tribunal had barred Murli Industries from selling or mortgaging its assets and prevented directors of the company from leaving the country without prior permission, a Times of India report said in May 2016.
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