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Binani cement sale: Bain-backed group said to be closing the near $980 million deal

The Dalmia Bharat consortium’s proposal includes offering about a 20% stake in Binani Cement to its lenders, the people said. Arpwood Capital Pvt is advising the investor group, the people said.

business Updated: Feb 28, 2018 12:18 IST
George Smith Alexander, P R Sanjai and Bhuma Shrivastava, Bloomberg
Binani Cement,Binani Cement sale,Dalmia Bharat
Dalmia Bharat made a joint offer with India Resurgence Fund, which is backed by Bain Capital Credit and local conglomerate Piramal Enterprises Ltd to buy out Biani Cement Ltd.(Adam Ferguson/Bloomberg News)

An investor group backed by Bain Capital is poised to win the bidding for Binani Cement Ltd., which is being sold under the Insolvency and Bankruptcy Code (IBC), people with knowledge of the matter said.

The consortium led by Dalmia Bharat Ltd., which was competing with billionaire Kumar Mangalam Birla’s UltraTech Cement Ltd., made a bid of about Rs 63.5 billion ($980 million), the people said Tuesday. Insolvency resolution officials were slated to reach an agreement with Dalmia Bharat as early as Tuesday evening, according to the people, who asked not to be identified because the information is private.

The Dalmia Bharat consortium’s proposal includes offering about a 20% stake in Binani Cement to its lenders, the people said. Arpwood Capital Pvt is advising the investor group, the people said.

Shares of Binani Cement’s Mumbai-listed parent company, Binani Industries Ltd., jumped as much as 5% Wednesday and were on track to close at the highest level in more than a month. The benchmark S&P BSE Sensex fell 0.40% at 11am, while Dalmia Bharat shares were trading lower by 0.61%

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.

Dalmia Bharat made a joint offer with India Resurgence Fund, which is backed by Bain Capital Credit and local conglomerate Piramal Enterprises Ltd., people with knowledge of the matter said earlier.

A spokeswoman for Dalmia Bharat declined to comment, while a representative for Binani Cement didn’t immediately respond to messages seeking comment. A representative for India Resurgence Fund couldn’t immediately comment.

First Published: Feb 28, 2018 12:17 IST