Nirma Group's Nuvoco Vistas Corp Acquires Vadraj Cement
As per reports, Nirma Group's Nuvoco Vistas Corp has completed its acquisition of the financially troubled Vadraj Cement by making a payment of Rs 1800 crore to lenders led by Punjab National Bank (PNB) and Union Bank of India.
The funds were received by the lenders and have been allocated accordingly. Although there were some delays due to litigation, the company managed to transfer the funds well in advance of the June 24 deadline.
PNB, which holds 25 percent of the over Rs 8000 crore debt, is set to receive Rs 431 crore, while Union Bank will obtain Rs 345 crore.
This acquisition will enable Nuvoco Vistas to increase its cement production capacity by over 20 percent, bringing it to approximately 31 MTPA, and it marks the company's third acquisition following Lafarge Cement and Emami Cement. A Mumbai bench of the NCLT approved this acquisition in April.
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Vadraj Cement, based in Gujarat and previously owned by ABG Shipyard, operates a 6 million tonne grinding unit in Surat, which will enhance Nuvoco Vistas’ existing production capability of 25 million tonnes by more than 20 percent.
The acquisition process was carried out through Vanya Corp, a wholly-owned subsidiary of Nuvoco Vistas. Following this, Vanya will be merged with Vadraj Cement as per the resolution plan, and Vadraj Cement will ultimately become a wholly-owned subsidiary of the company.
Nuvoco's Rs 1,800 crore bid surpassed the Adani Group's offer during an auction conducted under court supervision for corporate insolvency, as reported by ET in January this year. The Adani group-backed Ambuja Cement had collaborated with Prudent ARC-backed RKG Fund to take over the Gujarat-based cement manufacturer.
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Out of the Rs 1,800 crore offered by Nuvoco Vistas, Rs 1,725 crore is designated for settling financial creditors' debts, while the remaining amount is allocated for operational expenses, employee dues, and costs associated with the insolvency resolution process.