Dalmia Bharat, 3 others show interest in buying Murli Industries’ cement plant

4 September 2017

Dalmia Bharat, Hyderabad-based Sagar group and two other companies have placed separate bids to acquire the 3 million tonne integrated cement plant of Nagpur-based Murli Industries, sources familiar with the development told.

The lenders have tried several times in the past to sell the stressed asset to recover their dues from the company, promoted by Nagpur’s Maloo family.

The factory in Nagpur’s Chandrapur district, lying closed for more than a year, also includes a 2 mtpa grinding unit. Murli Industries owes the lenders Rs. 1,800 crores and has had interest in paper, solvent, power and pulp manufacturing.

Murli’s case was admitted for insolvency resolution by the Mumbai bench of the National Company Law Tribunal in April.

“One of the two companies has placed a bid for entire business of the company whereas the others including Dalmia Bharat are interested only in the cement operations of Murli,” one of the two sources said.

An insolvency resolution professional from Deloitte Touche Tohmatsu India is currently engaged with the company and the debtors to see if any scope exists to resolve the financial mess of the company that has a negligible cash flow now.

Murli reported a standalone net loss of Rs. 412 crores in 2015-16. Net sales were a mere Rs. 6.85 crores. The last quarter for which the company’s results are publically available is January-March of 2016.

A cement sector analyst said the cement unit had never worked at more than 70 percent load factor since it was commissioned in 2009-10. Several attempts made in the past to sell the plant have failed.

Trading in Murli Industries shares on BSE is suspended due to “penal reasons”, the stock exchange says on its web site. The company owes debt to Bank of Baroda, Punjab National Bank, Central Bank of India, State Bank of India, IDBI Bank, Edelweiss Asset Reconstruction Company, Allahabad Bank, among others. The lenders allege siphoning off of the funds of the company by its promoters.

“We would like to inform you that these are speculations and we would not like to comment on it,” a Dalmia Bharat spokesperson said in response to a Moneycontrol query.

Inorganic expansion has been a key to the 25 million tonne Dalmia’s growth strategy for cement business as setting up a new plant takes anywhere between five and seven years in the around 420 million tonne (capacity against 300 million tonne sales) Indian market, the world’s second largest after China.

Spanning over five years, the New Delhi-headquartered company has acquired Adhunik Cement, Odisha Cement and Bokaro Jaypee Cement to become the fourth largest cement player in the country.

Source-Livemint