The Battle for Binani Cement

The sale of the Indian cement maker's assets to competitors has been heated from the start, and as the Supreme Court is called into the matter, the question in everyone's minds is: what will the final decision be?

The Aditya Birla Group and Dalmia Bharat are locked in a fight for the acquisition of Binani Cement. The stressed company filed for bankruptcy in July 2017, but the race for its acquisition has been heated in the last few months, as the creditors reached a seemingly final decision. The accepted offer was contested, and now the company's current owner has requested the Supreme Court to get involved in a process that is challenging the legal limits of a regular acquisition.

Binani's downfall

Binani Cement was set up as part of the Braj Binani Group, an India-based global group with several areas of performance and interest. Established in 1997, the company is the largest subsidiary and asset of Binani Industries, and is also a significant cement producer in northern India, with a total production capacity of 11.3 million tons per year of ordinary Portland cement and pozzolana Portland cement.

Binani also owns foreign assets, such as Shandong Binani RongÔÇÖAn Cement, in China, Bhumi Resources in Singapore, a Binani Cement plant in the United Arab Emirates, and a ready-mix concrete company, Binani Ready-Mix Concrete, apart from non-cement related subsidiaries, such as Binani Energy, Merit Plaza, Swiss Merchandise Infrastructure, among others.

In the fiscal year of 2016-17, Binani Cement reported a net loss before tax of INR 42,722 lakh, compared to a net loss of INR 37,036 lakh in the previous fiscal year. This led the company to enter insolvency on July 2017, and the interested companies to scale up their competitive edge in order to acquire the asset.

Read the full article in ICCM 41

Photo Credit: Binani Cement