UltraTech offers Rs 7,266 cr to Binani Cement to pay-off bank debts
On Monday, Ultratech Cement which is India's largest exporter of cement is all set to buy 98% stakes of Binani Cement. Ultratech has also offered $1.1 billion to buy Binani Cement Ltd which is facing insolvency proceedings.
Ultratech, owned by Aditya Birla conglomerate, was one of the applicants who agreed to issue a "comfort letter" to the debt-ridden cement manufacturer. They also confirmed that they will provide Rs 7,266 crore to Binani Cement to pay-off bank debts and other liabilities as admitted in the Insolvency proceedings against an offer of sale or transfer of its entire BCL equity shareholding.
In a meeting which was held on Monday, in a request made by BIL the Board of Directors agreed to issue the comfort letter which confirms that Ultratech will provide Rs 7,266 crore funds to Binani Cement, being the amount it had offered to the Committee of Creditors in terms of the resolution plan submitted by it for acquiring BCL....," the filing said.
UltraTech Cement's counsel alleged during the hearing at the National Company Law Tribunal's Kolkata bench that they were 'not called' to attend the Committee of Creditors (COC) meet which took place on February 27th, when the highest bidder (H1) was declared.
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Ultratech's counsel also alleged that there was a 'lack of transparency'.
On March 8, the Aditya Birla Group company submitted the revised bid to the Resolution Professional (RP), Vijaykumar V. Iyer and its counsel appealed before the court to consider its revised resolution plan for insolvent Binani Cement.
During the hearing, Resolution Professional counsel said, the CoC considered the resolution plan of highest bidder on March 14 and the plan was approved by voting process.
"On March 14, the RP also put the revised resolution plan of Ultratech before the creditors' committee, but it was not accepted," counsel said.
The NCLT will hear the Binani's plea on March 22. On Monday, UltraTech shares ended 1.3 per cent lower in a Mumbai market that fell about 1 per cent. Binani Industries shares fell 4.8 per cent.
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First published: 20 March 2018, 11:05 IST