Piramal Group in race to buy stakes in Binani Cement, Electrosteel Steels
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NEWS : The cash-rich Piramal
Group is in the race to buy controlling stakes in Binani Cement and
Electrosteel Steels after their lenders asked India’s top conglomerates to bid
for distressed assets that have been referred to the National Company Law
Tribunal (NCLT) following default on bank loans.
The
distressed asset fund of the Piramal Group would make the bids and had sought
data from the lenders on the two companies, said a source close to the
development.
The NCLT
had, in July, admitted a petition against unlisted Binani Cement for insolvency
proceedings after the company defaulted on a Rs 97-crore loan to Bank of
Baroda. Binani Cement owed Rs 3,700 crore as of March 2016 to Indian lenders
led by Edelweiss Asset Reconstruction Company.
The company,
with 11.25 million tonnes of global capacity and a domestic capacity of 6.25
million tonnes, had also drawn attention from other cement makers, a lender
said. In financial year 2016-17, Binani reported sales of Rs 1,535 crore and a
loss of Rs 349 crore, as against net sales of Rs 2,038 crore and a loss of Rs
375 crore in the financial year ended March 2016.
With debts
of Rs 10,288 crore, Electrosteel Steels is among the 12 companies identified by
the Reserve Bank of India for continuous default. In 2016-17, Electrosteel
Steels’ sales were Rs 2,541 crore and it made a loss of Rs 1,464 crore (see
chart).
Six
companies — Srei Infrastructure, Tata Steel, Mesco Steel, Edelweiss,
Avalokiteshvar Valinv and Electrosteel Castings — formally expressed an interest in the firm
last week. Lenders said in the subsequent bidding stage, they had asked the
Piramals to join one of the companies that had submitted expressions of
interest for Electrosteel Steels.
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