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UltraTech offers to buy Binani Cement for Rs 7,266 cr
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SME Times News Bureau | 20 Mar, 2018
UltraTech Cement on Monday said it has concluded a commercial
understanding with Binani Industries to buy over 98 per cent stake in
its cement manufacturing subsidiary Binani Cement Ltd (BCL) which is
facing insolvency proceedings.
UltraTech, which was one of the
resolution-plan applicants in the insolvency proceedings of BCL, agreed
to issue a "comfort letter" to the debt-ridden cement manufacturer,
confirming that it will provide funds amounting to Rs 7,266 crore to
acquire the firm.
"The company has in-principle concluded
commercial understanding with BIL (Binani Industries Ltd) for purchase
of 98.43 per cent of the shareholding of BCL subject to termination of
IBC proceedings, entering into definitive agreement and other customary
and regulatory approvals,a the company said in a regulatory filing.
UltraTech,
owned by Aditya Birla Group, said that the Binani Industries, which is
independently seeking termination of the insolvency proceedings relating
to its subsidiary BCL, approached the company for arranging funds to
pay-off the lenders debts and other liabilities as admitted in the
Insolvency proceedings against an offer of sale or transfer of its
entire BCL equity shareholding.
BIL also requested the company to
issue a "comfort letter" to be used as a support in its application
seeking termination of the Insolvency and Bankruptcy Code (IBC)
proceeding.
"The Board of Directors at its meeting held today
(Monday) after considering the request made by BIL, has agreed to issue
the comfort letter confirming that the company will provide funds
amounting to Rs 7,266 crore, 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.
Meanwhile, during the
hearing at the National Company Law Tribunal's Kolkata bench on Monday,
UltraTech Cement's counsel alleged the company was "not called" to
attend the Committee of Creditors (COC) meet on February 27, when the
highest bidder (H1) was declared.
Its counsel also cited there was a "lack of transparencya.
According
to him, the Aditya Birla Group company had submitted the revised bid to
the Resolution Professional (RP), Vijaykumar V. Iyer, on March 8 and
its counsel appealed before the court to consider its revised resolution
plan for insolvent Binani Cement.
RP's counsel, however, said
during the hearing that 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 matter would be further heard on March 22.
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