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Lenders ask Binani promoters to come with deposits and guarantees

Lenders have asked the company to finalise the payment schedule by today

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After nearly five hours of discussion, lenders of Binani Cement have asked the parent Binani Industries tosubmit bank guarantees and a non-negotiable deposit of Rs 750 crore to settle the dues of all the creditors.

They have also asked the company to get the necessary approvals from the courts. The lenders are expected to meet again on Thursday to finalise the repayment Lenders to Binani Cement have examined the debt repayment proposal of Binani Industries which has evinced a keen interest to repay its debt The move is expected to favour Aditya Birla group company UltraTech which gave a letter of comfort to the the promoters of Binani Industries after it was voted as the second-highest bidder in the second round of bidding. Ultratech said it would pay Rs 7.200 crore.

"With both the NCLT (National Company Law Tribunal and NCLAT asking us to go for an out-of -court settlement, we feel it is better to settle the issue with the promoter group which have come forward and made the offer, which settles the dues of all the secured lenders with interest and unsecured lenders and operational creditors as well," according to a banker who is part of lender group.

The sale of the Braj Binani promoted Binani cement, the flagship company of Binani Industries was expected to be a smooth affair. The company's a global manufacturing capacity of 11.25 million tonne per annum with an integrated plant with two kilns and four in Rajasthan is expected to give both the warring companies a strong foothold in Western India.

In the first round of bidding, a number of companies including LafargeHolcim, Heidelberg Cement, India Cement, Orient Cement, Ramco Cement, Shree Cement, UltraTech Cement and Piramal Group, Ace stock market investor Rakesh Jhunjhunwala and Ramesh Damani of D'Mart had put in their bids. JSW Cement had emerged as the winner with a bid of $919 million.

But that auction was junked after it was discovered Binani Cement had offered a corporate guarantee $250 million for the acquisition of a fibreglass asset in Europe known as 3B in 2012 by Binani Industries.

By February 2018 the next auction was in progress with Dalmia Bharat Cement and UltraTech Cement in the race. Dalmia Bharat, which was in a consortium with Bain Capital's India Resurgent Fund and Piramal Enterprises, emerged as the largest bidder.

The dispute arose as the letter of comfort was handed out by UltraTech after it lost out to rival, the Dalmia-led consortium in a bidding process under the IBC 2016. UltraTech had put in a bid of Rs 6,200 crore, which it improved by Rs 1,066 crore after the bidder was selected. The company contested that it wasn't a transparent process. The move comes close on the heels of its rival Dalmia Cement announcing last week that its Rs 6,350 crore bid to buy Binani Cements has been accepted by the lenders. Besides offering Rs 6,350 crore, Dalmia had also offered a 20% equity in Binani to the lenders.

Matters got further complicated with State Bank of India, Hong Kong branch, approaching the NCLT to be paid off their dues of Rs 40 crore for corporate guarantees they had extended to Binani and also Exim Bank for repayment of an unsecured loan of Rs 620 crore.

Binani Industries approached the NCLT Kolkata asking for some time to pay off all its dues to all its financial and operational creditors.

Binani Cement also runs a grinding plant at Jebel Ali, Dubai and an integrated plant, Shandong Cement, in China. It products in India include 43 and 53 grades Ordinary Portland Cement and Portland Pozzolana Cement.

CONCRETE DEAL

  • Lenders have asked Binani Industries to get an approval from the court to settle the dues
     
  • The sale of the Braj Binani promoted Binani cement was expected to be a smooth affair
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