UltraTech Cement Ltd on Wednesday said that it has obtained the Competition Commission of India's approval for its $1.1 billion bid to acquire debt-laden Binani Cement Ltd.
UltraTech, part of the diversified Aditya Birla Group, is locked in a battle with Dalmia Bharat to acquire Binani Cement. It had recently moved the National Company Law Tribunal, challenging the decision by Binani Cement’s creditors to select a joint venture of Dalmia Bharat and Bain-Piramal as the preferred buyer.
In a stock-exchange filing, UltraTech said the resolution professional overseeing Binani Cement's bids had raised apprehensions about the company obtaining the CCI approval and this was the reason why its bid was rated lower than that of Dalmia's.
“The CCI clearance validates UltraTech’s contention that they were wrongly and unjustifiably rated H2 instead of H1,” it said.
Earlier this month, a consortium of Dalmia Bharat and Bain-Piramal's India Resurgence Fund was selected as the preferred bidder for Binani Cement with its Rs 6,300 crore offer. Their joint bid had also received CCI approval.
Subsequently, Ultratech had alleged a lack of transparency in the auction process of Binani Cement. Last week, UltraTech had entered into an arrangement with Binani Cement’s parent to provide Rs 7,266 crore ($1.1 billion) to help it terminate the insolvency proceedings against the bankrupt unit.
Responding to UltraTech's statement on CCI approval and a lack of transparency in the bidding process, Dalmia Bharat said that the evaluation criteria for the bids were fair and transparent.
Dalmia Bharat group CEO Mahendra Singhi said in an email statement that UltraTech hasn’t submitted any evidence to show that Binani’s creditors didn’t asset the bids correctly.
“We state emphatically that the likelihood of obtaining the CCI approval by a bidder was not at all a criterion in bid evaluation,” Singhi said. “In fact, CCI approval was contemplated to be a post NCLT approval step and hence, had been made a carved-out condition precedent to the resolution plans of all the resolution applicants.”
UltraTech is India's largest cement maker while Dalmia Bharat is the fourth-largest. Binani Cement has been undergoing corporate insolvency resolution proceedings initiated by the NCLT in July 2017. The company, along with its subsidiaries, has global cement capacity of 11.25 million tonnes. Its India capacity is about 6.25 million tonnes.