New Delhi, March 26 Leading cement maker UltraTech Cement on Thursday said it has settled with Jaiprakash Associates Ltd (JAL) in the arbitration dispute over the Dalla Super unit and associated mines.
In a regulatory filing, UltraTech Cement said 1,00,000 Series A Redeemable Preference Shares (Series A RPS) with a face value of Rs 1,00,000 each, totaling Rs 1,000 crore, which were placed in an escrow account for the Dalla Super unit and mines located in Uttar Pradesh, have been released.
This settlement will also help monetize JAL's assets in its ongoing Corporate Insolvency Resolution Process (CIRP), in which the rival Adani Group has emerged as the successful resolution applicant (bidder).
Adani Group, which is also the second-largest cement maker after Ultratech, had offered Rs 14,535 crore to acquire JAL in the CIRP. However, approval of Adani's bid is being contested by the Vedanta Group before the insolvency appellate tribunal, NCLAT.
UltraTech competes with the Adani group in the cement business, which is also rapidly building capacities through acquisitions and organic expansion at existing plants.
With this settlement, a long-standing dispute between UltraTech and debt-ridden JAL, which is currently going through insolvency resolution, has come to an end.
"Subsequent to the Parties reaching a settlement in respect of the arbitration and the Arbitral Tribunal passing a final award today, March 26, 2024, all rights and interests in the Dalla Super unit and mines have fully vested in the company, and all claims/proceeds and liabilities relating to the Series A RPS stand fully discharged," the UltraTech filing noted.
Dalla Super unit and associated mines were acquired by UltraTech in 2017, pursuant to a scheme of arrangement sanctioned by the National Company Law Tribunal (NCLT) bench at Mumbai on February 15, 2017, and NCLT bench at Allahabad on March 2, 2017.
The scheme was made effective from June 29, 2017, by the resolutions passed at the meeting of the Board of Directors of UltraTech and JAL held on June 29, 2017, respectively.
UltraTech had issued "escrow 1,00,000 Series A Redeemable Preference Shares of face value Rs 1,00,000 each in June 2017, which were to be released upon satisfaction of conditions relating to the Dalla Super unit and mines located in Uttar Pradesh.
However, due to certain disputes between the Parties, the matter was referred to arbitration.
JAL had acquired the Dalla assets along with its captive mines in 2007, through the sale of assets of Uttar Pradesh State Cement Corporation Limited (UPSCCL), which was being liquidated by the High Court of Allahabad.
JAL, with a bid of Rs 459 crore, was declared the highest bidder for bids invited for the sale of assets of the cement plants of UPSCCL located at Dalla, Churk & Gurma in District Sonebhadra and Chunar in District Mirzapur through a global tender.
It has six mines, namely Kajrahat, Ningha, Gurma, Julgul, Bhalua, and Bari. JAL had increased the clinker capacity of the acquired plant from 0.50 to 2.0 MTPA by installing a new clinkrisation unit.
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