CCI clears UltraTech’s bid to acquire Binani Cement

UltraTech Cement on Wednesday said it has received the go-ahead of the Competition Commission of India (CCI) on its bid for Binani Cement and added that this proves that apprehensions of the resolution professional (RP) were “unfounded” and that the company was “wrongly” and “unjustifiably” rated as the second-highest bidder. In a statement issued on Wednesday, UltraTech Cement said, “A lot of apprehensions were raised by the resolution professional about UltraTech obtaining the CCI clearance on its bid for Binani Cement. CCI have today cleared it. UltraTech was rated the H2 bidder instead of H1 for this reason. The CCI clearance validates UltraTech’s contention that they were wrongly and unjustifiably rated H2 instead of H1.” However, challenging UltraTech’s contention that it was “wronged”, Mahendra Singhi, group CEO – Dalmia Cement Bharat, said the evaluation criteria for the bids were “fair” and made known to all the bidders before the bids.

“We state emphatically that the likelihood of obtaining the CCI approval by a bidder was not at all a criterion in bid evaluation. In fact, CCI approval was contemplated to be a post-NCLT approval step and hence, had been made a carved-out condition precedent to the resolution plans of all the resolution applicants,” he said. Singhi further noted that the only criterion involving regulatory orders was whether any adverse regulatory order including an adverse CCI order imposing penalties had been passed against the bidder in the last five years. “No evidence has been cited to show that the CoC and its advisers did not make a correct assessment of bids. The reasons cited by the unsuccessful bidder for its failed bid in stock exchange filings and press interviews are misleading,” he said.

On March 19, Aditya Birla Group’s UltraTech Cement had announced that it has agreed to Binani Industries’ request to take over its subsidiary firm Binani Cement for Rs 7,266 crore. It had said Binani Industries will use the proceeds to pay off the lenders. UltraTech had offered a letter of comfort to Binani Industries and said its offer to buy Binani Cement is subject to the termination of the insolvency proceedings in the NCLT. Subsequently, Binani Industries had moved the Kolkata bench of NCLT seeking termination of the insolvency proceedings. Prior to this, in its meeting held on March 16, the CoC (committee of creditors) had approved the plan presented by Dalmia Bharat for taking over Binani Cement.

UltraTech had opposed it and also moved the NCLT alleging that there was lack of transparency on part of the RP to auction Binani Cement and it did not consider its revised offer which was higher than Dalmia Bharat’s. Dalmia Bharat has offered Rs 6,500 crore for Binani Cement. Binani Cement owes around Rs 7,000 crore to its creditors. On Tuesday, the Kolkata bench of the NCLT told Binani Cement’s CoC that in the larger interest of the creditors, it could give consideration to the application of Binani Industries looking for an independent solution outside the insolvency process, which is its request to UltraTech to take over its subsidiary Binani Cement.