New twists and turns in the Binani Cement assets sale
DBL provides performance bank guarantee of 10% for the upfront payment to lenders, RP alleges fraudulent transactions in Binani Cement
Dalmia Bharat (DBL) has issued a press release indicating that its unit, RPPL, has provided a performance bank guarantee of 10% of upfront payment to the financial creditors. This is in accordance with the term of acceptance of the Letter of Intent (LOI). This comes subsequent to the approval of DBL’s bid by the Committee of Creditors (CoC).
Meanwhile, the resolution professional (RP), Vijaykumar V Iyer, has moved the National Company Law Tribunal (NCLT), Kolkata, as per media reports. He alleged that there are fraudulent transactions of ~Rs 2,400cr involving Binani Cement (BCL) that are undervalued, extortionate and preferential. Though BCL has rejected the allegations, it has come as a surprise to UltraTech Cement (UCL). UCL management has indicated that no such information on pending investigation was disclosed during the bidding process.
Also, BCL’s Small and Medium Enterprises (MSMEs) creditors have filed an intervention petition against the RP and the CoC. The eight MSMEs have come together and have indicted that BCL owes them Rs700cr and accused the RP of meting out unfair and unjust treatment, as per media reports.
We are keeping a close eye on the events unfolding and will be watchful of the legal proceedings.