Dalmia Bharat set to acquire Kalyanpur Cement

MUMBAI: Dalmia Bharat, India’s second-oldest cement company, is set to acquire Patna-based Kalyanpur Cement after lenders approved a debt resolution plan aimed at reviving the entity that used to employ more than 300 people, two people familiar with the matter told ET.

The committee of creditors has submitted its recommendations to the Kolkata bench of the National Company Law Tribunal, which is yet to give the proposed acquisition its stamp of approval. The case was heard on Monday, and the final order is expected in a few days.

Dalmia Bharat outbid others in the fray - JSW Cement, JK Lakshmi Cement, and Star Cement - maintaining its winning streak as a buyer of stressed cement assets, having added Murli Industries also to its kitty.

“The size of the resolution may be more than Rs 350 crore,” said a person with direct knowledge of the matter. Assets Care and Reconstruction Enterprise is the key lender now.

"The Committee of Creditors (CoC) had filed its recommendations with the NCLT last week and we are waiting for a final order now," said another person familiar with the matter. "The acquisition will give Dalmia Bharat a presence in the fast growing cement market in the east," the person said.

Kalyanpur Cement was brought to the bankruptcy court in May last year by operational creditor Naresh Kumar & Company. Mumbai-based Divyesh Desai was appointed the resolution professional.

Kalyanpur Cement owes more than Rs 600 crore to banks and operational creditors, and has a capacity of 1 MTPA.

“The debt resolution assumes significance as the company is based out of Bihar, where the state government too has helped through relief and concessions,” said Arun Gupta, a Kolkata-based insolvency professional who advised Desai. “This will help generate employment in the state that is lacking in investments.”

Since 2014, when the lease of the main operative limestone mine that fed its production was cancelled and not renewed by the government of Bihar, the company began its downward spiral: Production fell from a normal level of close to 7 lac tonnes per annum to 2.23 lac tonnes in 2016-17.

Its net loss was Rs 95 crore for the financial year 2016-17.