A consortium of Dalmia Bharat Ltd and a fund formed by private equity firm Bain Capital and Piramal Enterprises Ltd has moved a step closer to buying Binani Cement Ltd after the bankrupt building material maker's creditors approved its bid.
Creditors to Binani Cement have recommended the proposal to the National Company Law Tribunal under the Insolvency and Bankruptcy Code (IBC), Dalmia Bharat said in a statement.
The equal joint venture formed by Dalmia Bharat and Bain-Piramal's India Resurgence Fund had emerged as the preferred bidder for the debt-laden cement company last month despite Aditya Birla Group-owned Ultratech Cement Ltd raising its bid. It is not clear if Ultratech is considering raising its bid again.
Dalmia Bharat said that the resolution plan it proposed involves paying more than Rs 6,300 crore to Binani's lenders and for capital infusion.
"Binani’s acquisition is the first billion-dollar transaction at the bankruptcy court where all secured financial creditors are being paid 100% of their verified claims and the fastest resolution achieved in a record time frame of 233 days," the statement said.
This is also the first-ever deal in which a foreign private equity investor has invested under the IBC, Dalmia said.
Dalmia Bharat said Binani is the third company under the IBC wherein it has received a decisive mandate, after Kalyanpur Cements Ltd in January and Murli Industries Ltd in December 2017.
Binani Cement has been undergoing corporate insolvency resolution proceedings initiated by the NCLT since July 2017. The cement maker owes more than Rs 3,900 crore to a group of lenders that include Edelweiss Asset Reconstruction Company, State Bank of India, Canara Bank and Bank of Baroda.
Binani Cement, along with its subsidiaries, has global cement capacity of 11.25 million tonnes. Its India capacity is about 6.25 million tonnes.
The Indian operations includes a 4.8-million-tonne integrated plant and a 1.4-million-tonne split grinding unit, both in Rajasthan. Its overseas operations include a 2-million-tonne grinding unit in Dubai and a 3-million-tonne clinker facility in China.
Dalmia Bharat is the fourth-largest cement manufacturer in India with production capacity of 25 million tonnes. It has 11 plants across eight states.