Dalmia Bharat-Bain set to win assets of Binani Cement

The assets of distressed cement maker Binani Cement are expected to be bought by an investor group lead by Dalmia Bharat and backed by Bain Capital. The group has offered 20 per cent stakes to the lenders of Binani Cement who have dragged the company to the insolvency court.

The investor consortium consists of Dalmia Bharat and India Resurgence Fund, backed by Bain Capital Credit and Piramal Enterprises. The consortium has offered a bid of Rs. 6,700 crore for Binani Cement. UltraTech Cement, which was seen as the front-runner for the company, had placed a matching bid, said news reports. But UltraTech was not favoured by the creditor's panel due to its past anti-competition practices. The Competition Commission of India (CCI) had penalised the company in the past over competition issues.

If the deal gets through, this will be the first successful debt resolution under insolvency proceeding in India wherein the creditors will not suffer a haircut (reduction of outstanding loan amount for settlement). The consortium has offered an upfront payment of Rs. 4,000 crore to secured lenders and also offered 20% stake in Binani Cement.

Post the restructuring of Binani Cement, the company will be merged with Dalmia Bharat. Binani Cement is a subsidiary of Binani Industries Limited. Dalmia Bharat is an active cement manufacturer in the Southern parts of India.

Meanwhile, the stock of Binani Industries was trading at Rs. 115.50 per share, up by 3.22 per cent, Dalmia Bharat was at Rs. 2,657.65 per share, down by 0.85per cent, while UltraTech Cement was at Rs. 4,146.35 per share, down by 0.65 per cent at 10:50 hours on Wednesday.