Dalmia Bharat joins hands with Piramal Bain fund to bid for Binani

2017-12-07

Dec. 7, 2017 - Dalmia Bharat Cement, India’s second-oldest manufacturer of the primary building material, has entered into an agreement with the Piramal Bain Resurgence Fund to bid for debt-laden Binani Cement Ltd, two people with direct knowledge of the plan told ET. Piramal Bain Resurgence Fund, the corpus dedicated to stressed assets, and Dalmia Bharat will likely bid for Binani’s 6.25-million-tonnes-per-year plants in Rajasthan, with the National Company Law Tribunal ( NCLT) seeking to resolve the debt issue at Binani.

India’s largest cement maker Ultratech Cement, Shree Cement, Nirma, JSW cement and My Home Industries have expressed interest in bidding for the plants.

Piramal Bain Resurgence fund, floated by billionaire Ajay Piramal and American private equity fund Bain Capital Credit, and New Delhi-based Dalmia Bharat entered into the agreement last week. Dalmia Bharat, which has formidable cement capacity in the eastern and southern parts of the country, is looking to replicate its success in lime-stone deficient northern India, where Rajasthan is the primary source of supplies to rich agrarian states of Punjab and Haryana, and the more affluent neighbourhoods of western Uttar Pradesh.

“The purchase of the Rajasthan unit can cater to the entire northern and western markets,’’ said one of the two persons cited above. Binani Cement has debt of about Rs 3,400 crore and lenders are seeking an enterprise value of about Rs 6,000 crore. Piramal Enterprises, Dalmia Bharat, and Binani Cement declined to comment either on the arrangement or the likelihood of bids.

Lenders dragged Binani to the insolvency court after it failed to repay its dues for the past few years. The company, a profitable one until a few years ago, was hit by Rs 700 crore royalty penalty from the Rajasthan government on its limestone mines in the state.

ET had reported that India’s largest cement maker Ultratech Cement, Shree Cement, Nirma, JSW cement and My Home Industries have expressed interest in bidding for the plants. The company is attractive to suitors seeking to expand their business in northern and western India and the Middle East, where Binani has a presence. The company’s India cement plants are located at two districts of Rajasthan – Sikar and Sirohi. Besides, it is present in China and Dubai.

Vijaykumar Iyer, partner at Deloitte Touche Tohmatsu India Llp, was appointed the interim resolution professional for Binani Cement.