A worker carries a sack of cement under a conveyor in a warehouse in Ferozabad, Uttar Pradesh, India. (Photographer: Udit Kulshrestha/Bloomberg)

Bain-Backed Bid for India's Binani Cement Wins Creditor Support

(Bloomberg) -- An investor group backed by Bain Capital won the support of Binani Cement Ltd.’s lenders as it seeks to take over the insolvent Indian company.

A committee of Binani Cement creditors approved the resolution plan from a consortium led by Dalmia Bharat Ltd., which was competing with billionaire Kumar Mangalam Birla’s UltraTech Cement Ltd., according to an exchange filing late Thursday. The resolution professional overseeing the sale process will now submit the plan to the National Company Law Tribunal for final approval, Dalmia Bharat said in the filing, confirming an earlier Bloomberg News report.

The Dalmia Bharat consortium bid about 63.5 billion rupees ($978 million) and offered close to a 20 percent stake in Binani Cement to its lenders, people with knowledge of the matter said last month. Dalmia Bharat proposed to make the Binani Cement investment through a 50-50 joint venture with India Resurgence Fund, which is backed by Bain Capital Credit and local conglomerate Piramal Enterprises Ltd., according to Thursday’s filing.

A successful sale may lure buyers for assets in Asia’s third-largest economy as authorities push lenders to clean up $210 billion of stressed debt. The central bank has already asked commercial lenders to resolve bad loans of the 40 biggest defaulters within a year as overdue borrowings hamper fresh investment and slow economic growth.

The process could be delayed as UltraTech, India’s biggest cement maker, has approached the NCLT with complaints on how the Binani sale process was run. A hearing will be held March 19 to consider UltraTech’s case, Chief Financial Officer Atul Daga said in an interview Wednesday. UltraTech has also written to the resolution professional overseeing the Binani sale, offering to increase its bid to about 69 billion rupees from about 62 billion rupees earlier, he said.

Dalmia Bharat said the Competition Commission of India has already granted approval to its proposed acquisition. Binani Cement has 11.25 million metric tons of global cement capacity, including 6.25 million tons in the Indian state of Rajasthan as well as operations in Dubai and China, the filing shows.

Binani Cement would mark Dalmia Bharat’s third successful bid for an insolvent cement company under the new Indian bankruptcy process. The company won approval for its resolution plans for Kalyanpur Cements Ltd. in January and Murli Industries Ltd. in December last year.

©2018 Bloomberg L.P.