Aditya Birla Group's UltraTech Cement says it has received approval from the Competition Commission of India for its bid for Binani Cement, which is currently undergoing insolvency proceedings in the National Company Law Tribunal.
The development comes just a day after UltraTech received a boost from the NCLT, after the bankruptcy court had asked the committee of creditors to consider a proposal by Binani Industries, Binani Cement's parent body, to pay off lenders' dues.
The proposal entails UltraTech issuing a comfort letter, confirming that the company will provide funds amounting to Rs 7,266 crore, the amount it has offered to the committee of creditors.
Binani will use the comfort letter as support to its application seeking termination of the IBC proceedings. Binani Industries has also offered to pay off Binani Cement's dues to creditors in two weeks, if a deal with UltraTech is allowed to go through.
Incidentally, UltraTech's earlier bid had been rejected and a Dalmia Bharat Group entity, Rajputana Properties Pvt Ltd, had been declared the highest bidder for Binani Cement. Dalmia Bharat had offered Rs 6,350 crore to buy Binani Cement.
However, Binani Industries and UltraTech had earlier alleged lack of transparency by the resolution professional in the bidding process.
“A lot of apprehensions were raised by the resolution professional about UltraTech obtaining the CCI clearance, on its bid for Binani Cement. UltraTech was rated the H2 bidder instead of H1, for this reason,” said UltraTech on Wednesday.
“The CCI clearance validates UltraTech's contention that they were wrongly and unjustifiably rated H2 instead of H1,” it added.
Dalmia Bharat Group, though, maintains that the evaluation criteria for the bidding of Binani Cement had been fair and obtaining approval from the CCI had never been a criteria in bid evaluation.
"The reasons cited by the unsuccessful bidder for its failed bid, in stock exchange filings and press interviews are misleading. Dalmia Bharat made the highest financial bid and had also obtained highest score in the evaluation," said Mahendra Singhi, group CEO of Dalmia Bharat Cement.
He added that no evidence had been cited to show the committee of creditors and its advisors did not make correct assessment of bids.
On March 19, UltraTech had said that it had in-principle concluded commercial understanding with Binani Industries for purchase of 98.43 per cent of the shareholding of Binani Cement, subject to termination of IBC proceedings and regulatory approvals.
Shares of UltraTech Cement closed at Rs 3,947.85 on the BSE, down 0.5 per cent on Wednesday. The announcement of CCI clearance was made after markets closed.