Displaying items by tag: National Company Law Tribunal

India: Binani Cement's committee of creditors (COC) has accepted a bid by UltraTech Cement. The COC will now submit UltraTech Cement’s plan to the National Company Law Tribunal (NCLT) for approval, according to the Times of India newspaper. However, the Supreme Court is also looking at the case following a petition by rival bidder Dalmia Bharat.

UltraTech Cement made a direct bid of US$1.12bn for the bankrupt Binani Cement following an auction in March 2018 that was originally won by Dalmia Bharat. Dalmia Bharat has disputed UltraTech Cement’s offer and the two companies have conducted legal campaigns to reinforce their respective claims.

India: The National Company Law Tribunal (NCLT) has asked the Committee of Creditors (COC) of Binani Cement to consider UltraTech Cement's revised offer. It has also set 24 June 2018 as the completion deadline of the insolvency resolution process, according to the Press Trust of India. The NCLT also asked the COC to reconsider the resolution plan of Rajputana Properties if the subsidiary of Dalmia Bharat Group was willing to raise its offer over UltraTech Cement’s.

A consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. UltraTech Cement then made a direct bid to Binani Cement a few weeks later. However, the Supreme Court blocked UltraTech Cement’s offer in mid-April 2018. UltraTech Cement has since made a raised offer to the resolution professional handling the insolvency process of Binani Cement.

India: Binani Industries says it has filed an application to stop the insolvency process for its subsidiary Binani Cement. It received an offer from UltraTech Cement to buy its majority stake in the cement producer in late March 2018, according to the Press Trust of India. However, the deal was subject to the ending of insolvency proceedings against Binani Cement whose Credit of Creditors (COC) led by Bank of Baroda had previously approved a bid from Dalmia Bharat.

Meanwhile, Rajputana Properties, a subsidiary of Dalmia Bharat, has asked the National Company Law Appellate Tribunal (NCLAT) to stay the settlement process considered by Binani Cement’s CoC. However the NCLAT refused the request. Previously the NCLAT asked the companies trying to buy Binani Cement to ‘amicably’ settle the dispute.

India: The creditors of Binani Cement have asked it to seek approval from the Supreme Court on an offer made by UltraTech Cement to buy the company outside of the on-going insolvency process. The lenders decided not to vote on UltraTech Cement’s offer, according to the Times of India newspaper. Instead, they asked for Binani Cement’s parent company, Binani Industries, to pay US$115m to show its commitment to the latest deal.

A consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. However, UltraTech Cement then made a direct bid to Binani Cement a few weeks later. Branches of the National Company Law Tribunal have since suggested that the companies settle the dispute ‘amicably.’ However, Binani’s creditors fear that Dalmia Bharat is likely to start legal proceedings without full court approval supporting UltraTech Cement’s direct offer.

Persistence has paid off for UltraTech Cement this week. Although the deal is not complete, all the signs are pointing towards India’s largest cement producer buying Binani Cement despite losing an auction for it last month. Here’s a recap of what has happened so far.

In July 2017 the National Company Law Tribunal (NCLT) in Kolkata, a semi-judicial body that rules on issues relating to companies, started insolvency proceedings for Binani Cement. It followed a plea by one of the cement company’s creditors, the Bank of Baroda, that had an outstanding claim of around US$15m. The Kolkata bench of the NCLT rejected Binani Cement’s argument that the debt was tiny compared to the assets of its parent company Binani Industries of US$2.15bn. It then appointed an administrator, or resolution professional, called Vijaykumar Iyer, a partner at Deloitte Touche Tohmatsu India. More on him later on.

The subsequent auction of Binani Cement raised lots of interest both internationally and locally due to its production base. The company operates a 4.9Mt/yr plant at Binanigram in Rajasthan with two kilns and four mills. It also runs a 1.4Mt/yr cement grinding plant at Sirohi in the same state. Unusually though for an Indian producer it also runs a 2Mt/yr grinding plant at Jebel Ali, Dubai in the UAE and a 0.5Mt/yr integrated plant, Shandong Cement, in China.

Its products domestically in India include 43 and 53 grades Ordinary Portland Cement and Portland Pozzolana Cement, with the Bollywood film star Amitabh Bachchan as its brand ambassador. On that last point the Indian Supreme Court chastised Binani Cement in 2014 for not paying sales tax in Rajasthan whilst being able to hire Bachchan! However, given the ferocity of the struggle to buy Binani Cement maybe all that marketing of the brand paid off, giving the producer a much higher profile than it might otherwise have had.

Anyway, lots of companies showed interest in Binani Cement in the first round of bidding in late 2017. CRH, LafargeHolcim, HeidelbergCement, India Cement, Orient Cement, Ramco Cement, Shree Cement, UltraTech Cement and Piramal Group were all linked to the auction. Eventually UltraTech Cement, JSW Cement, Ramco Cement, HeidelbergCement India, Dalmia Bharat and a pair of Indian investors all submitted bids and JSW Cement emerged as the winner with a bid of US$919m. However the emergence of an additional liability of around US$250m scuppered that auction when it turned out that Binani Cement had offered a corporate guarantee 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 and this time Dalmia Bharat Cement and UltraTech Cement led the race. Dalmia Bharat won the second auction with a bid of around US$1.03bn made in a consortium with Bain Capital’s India Resurgent Fund and Piramal Enterprises.

At this point the situation might have conceivably slowed down. Instead, UltraTech Cement kept on fighting and queried the entire bidding process. It then made a direct offer of US$1.11bn to Binani Cement in the form of a so-called ‘comfort letter’ that Binani Industries used to stop the insolvency process. At the same time it received approval from the Competition Commission of India in its bid for Binani Cement, the previous absence of which was one of the reasons its bid against Dalmia Bharat was rejected.

Indian company law now faced a dilemma over how a bankruptcy works given that the NCLT was meant to be in charge. A way out was found though when the NCLT in Kolkata and the National Company Law Appellate Tribunal both allowed the bidders to settle the dispute ‘amicably.’ To add further confusion the administrator Vijaykumar Iyer also alleged right in the middle of the final tussle between Dalmia Bharat and UltraTech Cement that fraudulent transactions had been made by Binani Cement! Whether this has any further implications remains to be seen.

At this stage nobody is likely to declare UltraTech Cement the winner of Binani Cement until it actually picks up the keys to the cement plants. Perhaps not even then in case of any lingering legal issues! UltraTech Cement clearly views Rajasthan as a growth area given the tenacity with which it has gone after Binani Cement. It operates two integrated plants in the state and is building two more of its own. After its long journey in buying plants from Jaiprakash Associates in 2017, UltraTech Cement is starting to look like the cement producer that simply won’t take no for an answer.

India: The National Company Law Appellate Tribunal (NCLAT) has allowed the companies fighting to buy Binani Cement to ‘amicably’ settle the dispute. The tribunal was hearing a petition filed by Binani Industries, which holds over 90% of Binani Cement, according to the Press Trust of India. It followed a suggestion by the National Company Law Tribunal of Kolkata that also asked Binani Cement to consider taking an out-of-court offer between the cement producer and its lenders.

A consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. However, UltraTech Cement then made a direct bid to Binani Cement a few weeks later.

India: National Company Law Tribunal (NCLT) of Kolkata has asked Binani Cement to consider taking an out-of-court offer between the cement producer and its lenders. The NCLT has asked the committee of creditors (COC) to take up a proposal by Binani Industries, the parent of Binani Cement, to pay off all lenders' dues for 'appropriate consideration', according to the Economic Times. Binani Industries had approached the NCLT, seeking to stop insolvency proceedings after getting a ‘letter of comfort’ from UltraTech Cement, which proposed to pay US$1.11bn to help Binani pay off its debts and buy a 98.43% stake in the company.

The decision appears to pave the way for UltraTech Cement to win the on-going fight for control of Binani Cement. A consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. UltraTech Cement then made its direct bid to Binani Cement a few weeks later.

India: Vijaykumar Iyer, a resolution professional with Deloitte Touche Tohmatsu India working for Binani Cement, has alleged that fraudulent transactions have taken place involving the promoters of the company. Iyer made an application in mid-March 2018 to the National Company Law Tribunal (NCLT) in Kolkata asking the court to take action and ‘appoint an appropriate investigation agency to investigate the directors of Binani Cement and the counter parties,’ according to the Economic Times. Sources quoted by the newspaper say that the application is likely to receive a hearing imminently. Binani Cement has denied the allegations.

Iyer’s application said that he had appointed Haribhakti & Co as a ‘forensic consultant’ in November 2017 for reviewing and identifying ‘suspect’ transactions. He said that since the inception of the corporate insolvency resolution process, he had not been provided access to all the required information and documents. He alleges that Binani Cement made several payments to ‘potentially related and/or connected customers and entities,’ such as Saraswati Sales (SSPL) and US$75.4m was outstanding at the end of November 2017, suggesting that sales were made to SSPL despite the fact that corresponding payments were not made to the corporate debtor. Other inconsistencies were also found suggesting that money was being removed from the business without paying outstanding debts.

Dalmia Bharat beat UltraTech Cement in a bidding war to buy Binani Cement for US$974m in early March 2018 in an auction was run by the National Company Law Tribunal under insolvency proceedings. However, UltraTech Cement has since made a US$1.11bn bid directly to Binani Cement to stop the insolvency process. UltraTech Cement has said it is ‘shocked’ by the allegations by Iyer and that it was unaware of any pending investigations when it made its latest offer.

India: UltraTech Cement has made a new US$1.11bn bid directly to Binani Cement in order to buy it. Binani’s parent company Binani Industries is independently seeking to stop the insolvency proceedings of its cement subsidiary using the money offered by UltraTech Cement in a so called ‘comfort letter.’ In a statement UltraTech Cement said it had in principle agreed to buy 98.5% of the shares of Binani Cement.

However, a consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. The auction was run by the National Company Law Tribunal under insolvency proceedings. Binani Cement has since complained that the bidding process was not run on a transparent process, according to the Economic Times newspaper. It added that the ‘shortcomings’ in the insolvency process had prompted the company to look at other options. The on-going struggle by UltraTech Cement and Dalmia Bharat is expected to test local bankruptcy law.

India: UltraTech Cement is querying the National Company Law Tribunal (NCLT) why its bid for Binani Cement had been rejected. The auction for the bankrupt Binani Cement was won by a consortium consisting of Dalmia Bharat and Bain Capital’s India Resurgent Fund and Piramal Enterprises, according to the Business Standard newspaper. UltraTech Cement is questioning how the bid selection process was conducted.

Although JSW Cement won the first round of bidding, the NCLT decided to ask for more bids. Bidders were then informed that their bids would be assessed using a weighted system that would consider each company’s background, experience and upfront cash to be paid to the secured lenders.