The Committee of Creditors of Binani Cement on May 28 approved the resolution Plan submitted by UltraTech Cement.
New Delhi: The lenders of Binani Cement have issued letter of intent to UltraTech after approving its bid to acquire the company under the bankruptcy code, Aditya Birla group firm said on Wednesday.
The Committee of Creditors (CoC) of Binani Cement on May 28 approved the resolution Plan submitted by UltraTech Cement, it said in a regulatory filing. The company said that the CoC "has today issued a letter of intent to the Company for acquisition of Binani Cement".
According to sources, the CoC of Binani Cement had voted in favour of UltraTech Cement's Rs 7,960-crore offer. The race to acquire Binani was bitterly contested between two resolution applicants - UltraTech and Dalmia Bharat group.
The CoC had earlier approved the bid of Dalmia Bharat Group. However, the Kolkata Bench of the National Company Law Tribunal had turned it down asking to consider UltraTech offer, which was higher. According to UltraTech, the "acquisition provides the company access to large reserves of high quality limestone."
It said: "The acquisition increases the Company's presence in the highly competitive and fast growing Northern and Western markets in the country." Binani Cement has a capacity of 6.25 million tonne per annum (MTPA) in Rajasthan comprising an integrated cement unit with capacity of 4.85 MTPA and a split grinding unit with capacity of 1.4 MTPA.
In addition, BCL subsidiaries operate 2 MTPA grinding unit in UAE, 3 MTPA clinker unit and 0.5 MTPA grinding unit in China, UltraTech said. "As the Company has already received the CCI approval, the resolution plan is now subject to the approval by NCLT," UltraTech further informed. Binani's acquisition would also provide UltraTech access to large reserves of high quality limestone.
"The Company is confident of turning around the operations of Binani Cement, which will benefit all the stakeholders of BCL and result in synergies from optimisation of costs and improved realizations," it said.
It would also "infuse the required financial stability and resources" in Binani Cements. On May 20, UltraTech announced to merge the cement business of BK Birla Group company Century Textiles and Industries through a share swap deal.
"Upon consummation of this transaction, the Company's cement capacity will stand augmented to 116.15 MTPA including the recently announced acquisition of cement units of Century Textiles & Industries Ltd," said UltraTech.