Displaying items by tag: National Company Law Tribunal

India: The National Company Law Tribunal (NCLT) has directed the initiation of insolvency proceedings against Jaiprakash Associates subsidiary Bhilai Jaypee Cement over debts owed to coal supplier Sidhgiri Holdings, amounting to US$5.12m. News18 News has reported that the NCLT has suspended the company’s board and appointed an interim resolution professional.

Sidhgiri Holdings sent a statutory demand notice in June 2024 over three partly-paid purchase orders for 6000t of coal between September 2021 and June 2022. The principal amount is US$3.43m, with US$1.74m in interest accrued.

Bhilai Jaypee Cement contested the insolvency plea, claiming that Sidhgiri Holdings filed it with an intent of recovery, because Bhilai Jaypee Cement is solvent.

India: The Mumbai bench of the National Company Law Tribunal has approved Nuvoco Vistas’ US$209m acquisition of Vadraj Cement. The deal will raise Nuvoco’s installed capacity by over 20% to around 31Mt/yr. It will be executed through wholly-owned subsidiary Vanya Corporation, which will be merged with Vadraj Cement as part of the deal.

Nuvoco Vistas will invest a further US$139m over 15 to 18 months to revive Vadraj Cement’s operations, which have reportedly been stalled for ‘nearly seven years’, and begin production by the end of 2026. Vadraj Cement’s assets include a 3.5Mt/yr clinker unit in Kutch and a 6Mt/yr grinding unit in Surat, Gujarat.

India: The National Company Law Tribunal (NCLT) has approved the demerger and transfer of Vinay Cement’s cement and mining operations to Dalmia Cement (North East), both subsidiaries of Dalmia Bharat. The order comes into effect on 31 March 2025. Dalmia Bharat will not issue shares under the arrangement. Both subsidiaries will continue operating under the company following the approval.

India: The National Company Law Tribunal has initiated a corporate insolvency resolution process for Vadraj Cement. The former cement producer defaulted on US$10.5m in debts owed to Punjab National Bank. Mint News has reported that Vadraj Cement has total debts of US$843m.

India: ABG Shipyard plans to sell Vadraj Cement, which owns a decommissioned clinker unit and grinding unit, as well as quarries and a jetty, in Kutch, Gujarat. The National Company Law Tribunal took over winding up proceedings for the former cement producer in September 2023. The Economic Times newspaper has reported JSW Cement, Adani Group and steel producer ArcelorMittal Group as potential buyers for the business. It expects Vadraj Cement to attract a price of US$240 – 300m, against debts of US$841m.

India: The National Company Law Tribunal (NCLT) has started insolvency proceedings against Andhra Cement, a subsidiary of Jaypee Group. The decision by the NCLT follows a petition filed by Pridhvi Asset Reconstruction and Securitisation claiming a default relating to bank loans taken out between 2012 and 2016, according to the Press Trust of India. Separately, Andhra Cement has asked its creditors to submit their claims by 10 May 2022 before the Interim Resolution Professional (IRP). Local media has also reported that the cement producer had been unable to operate its cement plant at above 60% capacity utilisation due to a shortage of working capital.

India: The Andhra Pradesh branch of the National Company Law Tribunal (NCLT) has approved Sagar Power’s resolution plan for the start of operations at the mothballed Panyam cement plant at Kurnool. Sagar Power intends to pay US$13.5m, together with RV Consulting Services, to settle the debts from the plant’s previous owners, according to the Times of India newspaper. The partners also plan to inject a further US$20.2m of fresh capital into the venture.

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.