BackDalmia Bharat submits binding bid for Murli Industries, seeks 80% haircut
The interim resolution professional for Murli Industries has received two external bidsone from Dalmia Bharat and the other from a Nagpur-based businessman which is not substantive
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Mumbai: Puneet Dalmia-controlled Dalmia Bharat group has submitted a binding offer to acquire Nagpur-based Murli Industries Ltd, which is currently facing bankruptcy proceedings in the National Company Law Tribunal (NCLT), two people directly aware of the development told Mint on condition of anonymity.
“The interim resolution professional (IRP) has received only two external bids and Dalmia Bharat is one of them," said one of the people cited above. “The second bid is from a Nagpur-based businessman, but the offer is not substantive." Mint had reported in August that Dalmia Bharat was among the suitors for Murli Industries.
“After full evaluation of the assets, only Dalmia Bharat has made a binding offer," the second person cited above said. “Dalmia’s binding offer is lower than what it had offered earlier," this person said, adding, “The total haircut sought by Dalmia is close to 80% of the outstanding loans."
The third bid from the promoters of the company now stands disqualified after the recent amendment to the Insolvency and Bankruptcy Code, which bars promoters from bidding if the outstanding loans of the company are classified as a non-performing asset (NPA) for a year or more. The value of the promoters’ bid was not immediately known. Murli Industries, promoted by the Maloo family, owes close to Rs1,800 crore to a group of lenders led by Edelweiss Asset Reconstruction Company (EARC), which owns 60% of the debt. Bank of Baroda owns 25%, while the rest is owned by smaller lenders.
Murli Industries which began operations with a solvent extraction plant in the early 1990s went public in 1993. In 1997, it diversified into paper products.
The group entered the cement business in 2010. It 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.
In April this year, lenders led by EARC moved the bankruptcy court against the company and an interim resolution professional was appointed from consulting firm Deloitte.
Apart from Dalmia Bharat, several cement companies such as Shree Cement and Sagar Cement had shown initial interest in Murli’s cement assets, while West Coast Paper Mills Ltd had given a non-binding offer for the paper unit, Mint had reported in August.
“Dalmia Bharat is primarily interested in the cement business of Murli Industries and is willing to pay a nominal price for the paper and solvent businesses," said the first person cited above.
Emails sent to EARC and Deloitte in this regard remained unanswered till press time, while a spokesperson for Dalmia Bharat said, “These are speculations and we would not like to comment on it."
According to the first person cited above, the Committee of Creditors (CoC) is expected to take a final call on the two external bids in the coming weeks. Under IBC rules, the lenders may also decide to liquidate the company if the resolution plans are not found to be viable.
Mint had reported in October that Innoventive Industries Ltd, a Pune-based steel products firm, was set to be liquidated after a CoC rejected all resolution plans submitted by bidders.
The Economic Times reported in November that NCLT had ordered the liquidation of the company acting on the recommendation of the IRP. Innoventive Industries is the first case filed under the Insolvency and Bankruptcy Code.
On Friday, shares of Murli Industries closed 4.51% lower at Rs1.27 while Dalmia Bharat rose 1.29% to Rs3057.40. The benchmark Sensex closed 0.27% higher on that day at 33,679.24 points.
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