The acquisition of Binani Cement will, however, be subject to the Supreme Court’s ruling, with a Dalmia Bharat Ltd-led consortium challenging the 15 May order of the National Company Law Appellate Tribunal that allowed lenders to consider UltraTech’s revised offer. Photo: Reuters
The acquisition of Binani Cement will, however, be subject to the Supreme Court’s ruling, with a Dalmia Bharat Ltd-led consortium challenging the 15 May order of the National Company Law Appellate Tribunal that allowed lenders to consider UltraTech’s revised offer. Photo: Reuters

Binani Cement lenders back UltraTech’s offer

Binani Cement's committee of creditors (CoC) voted in person to approve UltraTech's bid at the meeting on Monday

Mumbai: UltraTech Cement Ltd’s Rs7,950 crore bid to acquire Binani Cement Ltd has received near-unanimous backing from lenders to the distressed building material maker even as a legal battle reached the country’s top court, two people aware of the development said.

Binani Cement’s committee of creditors (CoC) voted in person to approve UltraTech’s bid at the meeting on Monday, the people said, requesting anonymity.

“UltraTech is being supported almost unanimously by the lenders," one of the people, a banker, said. “The Supreme Court has not put a stay on the process; so the direction is clear."

The acquisition of Binani Cement will, however, be subject to the Supreme Court’s ruling, with a Dalmia Bharat Ltd-led consortium challenging the 15 May order of the National Company Law Appellate Tribunal that allowed lenders to consider UltraTech’s revised offer. The offer was submitted after lenders selected Dalmia as the top bidder.

The Supreme Court is likely to hear the appeal by Dalmia Bharat next week. The consortium is challenging UltraTech’s eligibility to bid under the Insolvency and Bankruptcy Code, which disallows defaulting promoters from being resolution applicants. Dalmia’s contention is that UltraTech is working in concert with Binani Industries Ltd, the parent of Binani Cement, and is hence a defaulter.

Piramal Enterprises and Bain Capital are the other members of the Dalmia Bharat-led consortium.

“The process has been laid out and has to be followed. The (value) maximization is happening beyond the process, which is not correct. It is a lacuna in the law and is being decided by NCLT (National Company Law Tribunal) and SC," Ajay Piramal, chairman of Piramal Enterprises, said in an interview.

Dalmia Bharat has offered lenders Rs6,350 crore to take over Binani. UltraTech, which had originally bid lower, later raised its bid by more than Rs1,000 crore. Binani Cement’s lenders allowed Dalmia to match UltraTech’s bid, but Dalmia chose to challenge the process in court.

Bankers say the insolvency code allows for “value maximization" of an asset and NCLT and the Supreme Court are also of the same view.

Binani Cement owes about Rs6,313 crore to banks and operational creditors, who will be paid back in full under UltraTech’s resolution plan.

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