The bids, which were opened in front of the CoC on January 16, ranged from Rs 4,000 crore to Rs 6,000 crore
Rajasthan-based Binani Cement has attracted the highest bid of Rs 6,000 crore at the upper ceiling, but the six bidders have attached several clauses which the committee of creditors (CoC) will evaluate to finalise the best buyer.
The bids, which were opened in front of the CoC on January 16, ranged from Rs 4,000 crore to Rs 6,000 crore, a source familiar with the development said. Since each bid came with various clauses, the CoC could not decide on the winner.
"The bids are very attractive, but we need to closely examine the offers to identify which is most suited to the creditors. Some have offered cash upfront while others have given equity upside. So we have to examine the bids," the source said.
The CoC has appointed turnaround firm Alvarez & Marshall to whet the bids.
"The bids have come with a number of offers to identify which would be the best one," another source added.
Binani Cement, owned by Braj Binani, has received five bids from leading cement companies and one joint bid from ace stock market investor Rakesh Jhnunjhunwala along with Ramesh Damani of D-Mart.
The cement companies bidding for Binani are Aditya Birla-owned UltraTech, JSW, Ramco Cement, HeidelbergCement India and Dalmia Cements.
Bankers do not expect a haircut from this deal. Binani Cement owes banks about Rs 4,000 crore.
The company was under the corporate insolvency process of the Insolvency and Bankruptcy Code 2016 from July 25, 2017 and Vijaykumar Iyer from consultancy firm Deloitte has been appointed as the IRP (interim Resolution Professional) for the company. In July, the Kolkata bench of the National Company Law Tribunal (NCLT) had admitted an insolvency petition against Binani Cement by Bank of Baroda (BoB) after the company failed to repay a sum of Rs 97 crore.
Binani Cement has a global manufacturing capacity of 11.25 million tonne per annum with an integrated plant in India and China and grinding units in Dubai. It has two manufacturing facilities outside India -- one in China (Shandong Binani Rongan Cement) and another one in Dubai (Binani Cement factory). Binani Cement has a well-established sales network in India, UAE, UK, Sudan, South Africa, Tanzania, and Namibia.
Binani Cement's plants in Rajasthan with a capacity of 6.25 million tonne a year.
"The purchase of the Rajasthan unit can cater to the entire northern and western markets for the domestic bidders," said a banker. The company's cement units were running in perfect condition, but got into financial difficulties after the Rajasthan government asked the company to pay value-added tax arrears of Rs 181 crore for 2008-11 at one go and the diversification related issues.
Braj Binani has been instrumental in the diversification initiative of the Binani Group into cement, glass fibre, Engineering, Procurement & Construction (EPC) and ready mix concrete products.
The company also diversified into fibre glass manufacturing by setting up a unit in United Kingdom, which resulted in the company balance-sheet getting stretched. It reported a net loss of Rs 289 crore in 2015-16 on Rs 1,524 crore in revenues, primarily owing to an interest outgo of Rs 368 crore.
CONCRETE DEAL
- The bids, which were opened in front of the CoC on January 16, ranged from Rs 4,000 crore to Rs 6,000 crore
- The six bidders have attached several clauses which the committee of creditors (CoC) will evaluate to finalise the best buyer
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