

Binani Cement is the flagship unlisted subsidiary of Binani Industries

The committee of creditors (CoC) of the debt-laden Binani Cement has approved the resolution plan submitted by Dalmia Bharat-controlled Rajputana Properties to acquire the cement firm. This is the third resolution plan to be approved under the Insolvency and Bankruptcy Code, 2016, (IBC) for a large stressed asset. It follows Tata Steel being declared the H1 bidder for Bhushan Steel and Liberty House the highest preferred bidder for Amtek Auto earlier this month. “The CoC of Binani Cement has recommended the resolution plan to the National Company Law Tribunal (NCLT) for its requisite approval,” Dalmia Bharat said in statement on Friday, adding that the resolution plan has received almost 100% approval of the CoC members. “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,” Bharat Dalmia said. As per details on Binani Cement’s website, financial creditors of the company had claimed `6,470.26 crore, while the NCLT had admitted claims worth `6,469.36 crore. Creditors to Binani Cement include State Bank of India, IDBI Bank, Canara Bank, Bank of Baroda, Bank of India and Edelweiss Asset Reconstruction Company, among others. Binani Cement is the flagship unlisted subsidiary of Binani Industries.

In FY17, Binani Cement had posted a net loss of `348 crore on revenues of `1,527 crore, according to Capitaline data. Its parent Binani Industries had a total debt of Rs 6,595 crore at the end of FY17 and it too incurred a net loss of Rs 461 crore on revenues of Rs 3,666 crore for the fiscal. Dalmia Bharat posted a net profit of Rs 345 crore during the period, while its net sales was at Rs 7,016 crore. The Kolkata bench of the NCLT had admitted an insolvency petition against Binani Cement on July 25, 2017. Bank of Baroda had referred the company to the bankruptcy court. Vijaykumar Iyer of Deloitte India was appointed as the resolution professional. “This transaction meets Dalmia Bharat’s disciplined investment criteria achieved through formation of a 50:50 joint venture with India Resurgence Fund, which is backed by Piramal and Bain,” Bharat Dalmia said.

In a parallel move, rival bidder UltraTech Cement is understood to have approached the NCLT with complaints regarding the sale process of Binani Cement. The hearing is likely to be scheduled on March 19. The company is also reported to have increased its bid value for Binani Cement. Binani Cement, along with its subsidiaries, has a global cement capacity of 11.25 million tonnes. Binani’s India capacity is 6.25 million tonnes at its plants in Rajasthan. The company’s overseas operations include a grinding unit in Dubai and a clinker facility in China.

Dalmia Bharat’s cement capacity is 25 million tonnes, spread across eight states and 11 manufacturing units. It produces speciality cement used for oil wells, railway sleepers and airstrips and is the country’s largest producer of slag cement. Shares of Binani Industries closed at Rs 97.85 each, down 3.79% on the BSE, while the Dalmia Bharat stock closed at Rs 2,840.20, down 0.78% from its previous close.