The Mumbai bench of the National Company Law Tribunal (NCLT) has sanctioned the acquisition of Vadraj Cement by Nuvoco Vistas Corp Ltd, a cement manufacturer owned by the Nirma group. Vadraj Cement, which is based in Gujarat and was previously owned by ABG Shipyard, has acknowledged liabilities amounting to ₹9,633 crore.
The winning bidder’s proposal includes a payment of approximately ₹1,800 crore to acquire the company through the bankruptcy proceedings. In its order dated April 1, the division bench, comprising Justice VG Bisht and technical member Prabhat Kumar, stated, “No authority shall issue orders imposing any tax, demand, or penalty on the corporate debtor (Vadraj Cement) concerning the period prior to the approval of the resolution plan. Any such demand, if made, shall not be enforceable as it is considered extinguished under the terms of the approved resolution plan.”
However, the tribunal clarified that the approval of the plan shall not be construed as a waiver of any statutory obligations of the corporate debtor and may be dealt by the relevant authorities in accordance with law in so far as such obligation pertains to a period after the approval of the resolution plan.
Prior to the tribunal’s endorsement, the secured creditors of the company unanimously voted in favor of the resolution plan proposed by Nuvoco Vistas. Nuvoco Vistas, a subsidiary of the Nirma group, is set to acquire Vadraj Cement through its fully owned subsidiary, Vanya Corporation Pvt Ltd.
At present, Vadraj Cement operates grinding units in Surat with a total capacity of 6 million tonnes, which will enhance Nuvoco Vistas’ existing production capacity of 25 million tonnes. Additionally, the company possesses a clinker capacity of 3.5 million tonnes located in Kutch, Gujarat, along with limestone reserves and a dedicated jetty. This acquisition will position Nuvoco Vistas as the fifth-largest cement producer in India, with a total manufacturing capacity of 31 million metric tonnes per year.
In addition to Nuvoco Vista, Pulkit Gupta, the resolution professional supported by EY, has received revival proposals from various contenders, including JK Cement Ltd, RKG Fund II, JSW Cement Ltd, KIFS, and Orissa Metaliks Pvt Ltd. According to the sanctioned resolution plan, the successful bidder is required to disburse ₹1,706 crore to financial creditors and ₹93.71 crore to operational creditors within 45 days following the approval of the resolution plan. Punjab National Bank holds approximately 25.40 percent of the voting rights in the creditors’ committee, with an acknowledged claim of ₹2,122 crore. Other significant lenders to the insolvent cement company include Union Bank (₹1,620 crore), Indian Overseas Bank (₹1,419 crore), Central Bank of India (₹1,391 crore), and JC Flower ARC (₹677 crore).
