A consortium of Dalmia Bharat and Bain Piramal Resurgence Fund emerged the top bidder for Binani CementBSE 0.06 % trumping Aditya Birla Group’s UltraTech Cement, with a Rs 6,700 crore offer that will see banks getting all their money back, challenging the assertion that bankers will face losses in every bankruptcy resolution case.
After a four-hour meeting in Mumbai, lenders led by Bank of Baroda voted for the Dalmia-Bain plan that also involves some equity infusion, said two senior bankers aware of the development.
This is likely to be the first debt resolution at the bankruptcy court in which lenders will not have to take any haircut on loans outstanding.
Bank of Baroda referred Binani Cement to the bankruptcy court after it failed to repay Rs 410 crore. Haircut refers to the amount lenders have to sacrifice to settle a loan.
“The total offer made by the Dalmia consortium is Rs 6,700 crore, which includes Rs 6,313 crore in dues to lenders and another Rs 400 crore of capital infusion for running the company,” said a banker who did not want to be identified.
Further, unsecured lenders will be given an option to accept cash or equity in lieu of dues.
Although UltraTech’s offer nearly matched that of Dalmia-Bain, the creditors did not favour it due to possible competition issues.
“Birla’s UltraTech offer was almost at par, but as per the evaluation criteria, they suffered on account of past penalties that were levied by the Competition Commission of India (CCI),” said another source. The lenders had appointed consulting firm Alvarez & Marsal to evaluate the bids.
UltraTech Cement had approached CCI over its Binani Cement bid. Incidentally, UltraTech has acquired two cement plants between 2014 and 2017 from JP Associate which has been approved by CCI.
Further, the promoter of Binani Industries had approached the Kolkata bench of the bankruptcy court seeking permission to participate in the resolution process on the grounds that the deal was being undervalued by resolution professional, Vijaykumar V Iyer, backed by Deloitte.
If the deal goes through, it will be the third such acquisition for Dalmia Bharat, following that of bankrupt Murli Cement and Kalyanpur Cement.
Others in the fray included billionaire Rakesh Jhunjhunwala in partnership with D-Mart promoter Radhakishan Damani, Heidelberg, the JSW Group and Ramco Cements.
Edelweiss ARC has the largest exposure with Rs 2,673 crore followed by Bank of Baroda with Rs 410 crore, State Bank of India (Rs 323 crore) and Canara Bank (Rs 320 crore). Among unsecured lenders, IDBI Bank has an exposure of Rs 1,567 crore followed by Exim Bank (Rs 617 crore) and Bank of Baroda’s London branch (Rs 175 crore).
Source: Economic Times