The consortium led by Bharat Dalmia Cement may raise objections to UltraTech’s bid for Binani Cement if the lenders agree to accept the Aditya Birla Group company’s offer to increase the price tag. While Bharat Dalmia was declared the highest bidder for the debt-ridden Binani Cement, UltraTech offered to increase its original bid by ₹700 crore.
“Lenders have issued letter declaring Bharat Dalmia Cement consortium as the highest bidder and rejected UltraTech bid. Now whatever price UltraTech is willing to pay is immaterial and does not have any value,” said sources close to the Bharat Dalmia camp.
“In a closed bidding process, can UltraTech be allowed to revise its bid after knowing the amount of the winning bid? If so, all the bidders should be allowed to revise their bids,” the sources added.
They said Bharat Dalmia is confident of taking over the stressed asset of Binani Cement despite the rival Aditya Birla Group-owned UltraTech Cement last Thursday raising its bid by ₹700 crore to ₹7,200 crore. The increase in bids came well after the lenders announced Bharat Dalmia as the highest winning bidder.
A day before revising the bid higher, UltraTech had itself moved the National Company Law Tribunal claiming lack of transparency in selection of highest bidder for the Binani asset.
Atul Daga, Chief Financial Officer, UltraTech Cement, had told BusinessLine that though the resolution professional had said the winning bidder will be decided based upon a scoring methodology, there was no clarity in the process being undertaken.
When asked whether lenders will accept Ultratech’s new bid, Daga said: “We have submitted our revised bid. It is for the lenders to decide what best suits them. They will accept it if they want to extract the maximum value for the stressed asset.”
Binani Cement owes about ₹4,000 crore to lenders and ₹2,000 crore to operational creditors. If the Bharat Dalmia Cement bid is endorsed by NCLT, it will be its third acquisition of a bankrupt company after Murli Cement and Kalyanpur Cement.
“It is surprising that UltraTech is claiming that there was no transparency in the bidding as the score sheet based on eligibility was displayed on the Website in advance and some of the bidders had even raised questions on it,” said an executive of a cement company.
The outcome of the Binani Cement case will be watched keenly not only by interested parties but also by global companies as the NPA-laden banking sector tries to attract foreign investors interest in future auctions. Lenders are in the process of monetising defaulting companies assets to recover over ₹3-lakh crore of bad debt through the NCLT drive process.
Binani Cement, which has a production capacity of 10 mtpa, was dragged to NCLT by Bank of Baroda after it defaulted on ₹410-crore loan.
Edelweiss ARC has the largest exposure with ₹2,673 crore followed by Bank of Baroda with ₹410 crore besides State Bank of India (₹323 crore) and Canara Bank (₹320 crore). Unsecured lenders include IDBI Bank (₹1,567 crore), Exim Bank (₹617 crore) and Bank of Baroda’s London branch (₹175 crore).
