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BCL auction: UltraTech to buy Binani Cement for Rs 7,266 crore, seeks end to insolvency proceedings

BCL auction: UltraTech to buy Binani Cement for Rs 7,266 crore, seeks end to insolvency proceedings

In a regulatory filing on Monday, Binani Industries Ltd (BIL) board decided to move the National Company Law Tribunal (NCLT) to terminate the insolvency proceedings commenced against its subsidiary BCL.

In the latest turn of events in the auctioning of beleaguered Binani Cement Ltd (BCL), Aditya Birla Group's UltraTech Cement on Monday said it is ready to buy the loan defaulters stressed assets for Rs 7,266 crore. Earlier, Dalmia Cement claimed that the lenders had accepted its bid of Rs 6,350 crore to buy Binani Cements Ltd (BCL). UltraTech Cement last Friday had also filed a petition with the NCLT, seeking the cancellation of the lenders' vote. UltraTech had alleged the resolution process at Binani Cement "was shrouded in secrecy", with bidders not being allowed to participate in the meetings.

In a regulatory filing on Monday, Binani Industries Ltd (BIL) board decided to move the National Company Law Tribunal (NCLT) to terminate the insolvency proceedings commenced against its subsidiary BCL. "In consideration thereof, upon the termination of the insolvency proceedings of Binani Cements, the company has agreed and concluded in-principal commercial understanding to sell its entire 98.43 per cent shareholding interest in BCL to UltraTech Cements Ltd," BIL stated.

The development came after the company received the backing from UltraTech Cement to support it and BCL with funds required to pay off dues of the lenders. Earlier in the day, UltraTech said in a statement that BIL - the promoter firm of BCL - had approached it for arranging funds to pay-off the lenders. The company's board agreed to issue 'comfort letter' to provide Rs 7,266 crore in return for 98.43 per cent stake in Binani Cement. "The board of directors at its meeting held today after considering the request made by BIL has agreed to issue the comfort letter confirming that the company will provide funds amounting Rs 7,266 crore being the amount it had offered to the CoC in terms of the resolution plans submitted by it for acquiring BCL," said UltraTech Cement.

However, this would be "subject to termination of IBC proceedings, entering into definitive agreement and other customary and regulatory approvals", it added. According to UltraTech, BIL has requested the company to issue a comfort letter which shall be used as a support in its application seeking termination of the IBC proceeding. UltraTech Cement was one of the resolution applicants for the debt ridden BCL and its plan was not approved by the Committee of Creditors (CoC) of BCL. Last week, BIL had moved National Company Law Appellate Tribunal (NCLAT) filing contempt petition against the conducts of the Resolution Professional (RP) of BCL, alleging that its order was not followed while declaring the successful resolution plan for the struggling cement maker.

Filing a contempt plea against RP and representative of Deloitte who is assisting resolution plan, Binani Industries has also asked the NCLAT to declare the meeting of CoC of BCL held on March 14, 2018 as "null and void" in which bid of Dalmia Bharat Cement was approved.

With PTI inputs