NCLAT dismisses plea against Nuvoco Vistas’ acquisition of Vadraj Cement

The National Company Law Appellate Tribunal (NCLAT) has rejected a plea challenging Nuvoco Vistas Corporation’s acquisition of Vadraj Cement during the insolvency resolution process, upholding the order of the National Company Law Tribunal’s (NCLT) Mumbai bench, according to a report by news agency PTI.

A two-member bench of NCLAT led by Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra dismissed an appeal filed by an employee representative of Vadraj Cement, who had objected to the resolution plan citing issues over gratuity dues.

In April this year, NCLT had cleared Nuvoco Vistas’ resolution plan, which involved an upfront payment of ₹1,800 crore. Nuvoco, the cement business of the Nirma group, acquired Vadraj Cement through its subsidiary Vanya Corporation.

Vadraj Cement, earlier owned by ABG Shipyard, has a clinker unit of 3.5 MTPA in Kutch and a 6 MTPA grinding unit in Surat, besides a captive jetty in Kutch. The company had a total debt of over ₹8,000 crore.

While dismissing the appeal, NCLAT noted that the average liquidation value of Vadraj Cement stood at ₹1,080 crore and the fair value at ₹1,668 crore, whereas the resolution plan’s value exceeded both benchmarks. The plan had also secured the unanimous approval of the Committee of Creditors.

On the employees’ claims, the tribunal said the total gratuity dues were only ₹2.86 crore, which was adequately covered in the plan. It added that the payout to employees was in line with the approved resolution plan and found “no merit” in the objections raised.

The corporate insolvency resolution process (CIRP) against Vadraj Cement began in February 2024 following a petition by Oriental Bank of Commerce (now Punjab National Bank).

Nuvoco, the country’s fifth-largest cement producer, has expanded rapidly through acquisitions, including Lafarge India in 2016 and Emami Cement in 2020. With Vadraj Cement, its consolidated capacity has risen to 31 MTPA.

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