UltraTech Cement sells Chinese arm for ₹900 crore.

UltraTech Cement, an Aditya Birla Group company, has decided to sell its entire stake in China unit for $120 million (₹900 crore).

UltraTech had inherited the China plant as part of acquisition of Binani Cement for ₹7,950 crore in 2018.

Singapore-headquartered Krishna Holdings Pte and Nathdwara Cement, both wholly-owned subsidiary of UltraTech Cement, have entered into a binding agreement for divesting entire equity shareholding of 92.5 per cent in Shandong Binani Rongan Cement, said UltraTech Cement in a statement recently.

In terms of the agreement, it added Krishna will divest its entire shareholding at an enterprise value of RMB 845 million, equivalent to $120 million subject to customary closing conditions and regulatory approvals in compliance with the local laws.

Binani Cement was dragged to insolvency proceedings in July 2017 after it defaulted on ₹3,900 crore loan to a group of lenders that include Edelweiss Asset Reconstruction Company, State Bank of India, Canara Bank and Bank of Baroda.

In February 2018, UltraTech and a consortium of Dalmia Bharat and Bain-Piramal’s India Resurgence Fund had bid for the company.

The Dalmia consortium initially emerged as the preferred bidder with an offer of ₹6,300 crore. However, UltraTech sweetened its initial bid twice to close the deal at ₹7,950 crore.

In this process, UltraTech had acquired 6.25-million tonne plant of Binani Cement in Rajasthan that comprises an integrated cement unit with capacity of 4.85 million tonne and a 1.4-million tonne split grinding unit which has integrated with itself fully. Binani Cement also had operations in Dubai and China.

HBL