JSW highest bidder for Binani cement
Sajjan Jindal’s JSW Group has emerged as the highest bidder for Binani Cement, exceeding submissions from billionaire Rakesh Jhunjhunwala and UltraTech, said three people familiar with the development. JSW’s bid is worth about Rs 5,900 crore, they said.
While the bids were revealed to the committee of creditors two days ago, banks will take a final call on the winner in the coming days. The lenders have appointed consulting firm Alvarez & Marsal to evaluate bids. Bankers are confident Binani is one asset that they won’t lose money on.
ET reported on January 16 that cement makers such as UltraTech, Heidelberg, JSW Group, Dalmia Bharat and Ramco Cements besides Jhunjhunwala had made proposals to acquire assets of the debtridden company. Dalmia Bharat partnered billionaire Ajay Piramal to bid, while JSW submitted its proposal jointly with a private equity firm and Ramco Cement tied up with PE fund True North.
“We have received several bids ranging from Rs 4,500 to a little less than Rs 6,000 crore, which is enthusing,” said a bank official. “I always maintained that we won’t have to take a haircut on this transaction. We will have to study these proposals very carefully to see which the best fit is.”
JSW declined to comment on the matter.
Parth Jindal, JSW Cement managing director, told ET earlier this week that the group would “aggressively bid for stressed assets in cement, steel, and power that are undergoing bankruptcy proceedings”.
Lenders have made a claim of Rs 3,884 crore on the company. This includes loans acquired by Edelweiss Asset Reconstruction Co from banks and dues to State Bank of India, Canara Bank and Bank of Baroda. Apart from this, the company also faces claims of Rs 2,429 crore from IDBI Bank and SBI in the form of corporate guarantees.
JSW Cement is looking to increase production capacity in West Bengal to 3.6 million tonnes (mt) per year, up from the current 2.4 mt at an estimated investment of Rs 300 crore. The company has already invested close to Rs 800 crore in a 2.4 mt grinding plant at Salboni in West Bengal. It will also invest close to Rs Rs 100 crore for setting up an 18 MW captive power plant. Binani Cement has a production capacity of close to 11mt, of which nearly 6 mt is in India. It has a grinding unit in Dubai and a plant in China.