UltraTech Cement said it has entered into an agreement with Binani Industries to buy 98% stake in its debt-ridden subsidiary Binani Cement Ltd (BCL) which is going through insolvency proceedings.

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In a filing to the stock exchange, UltraTech said it will issue a comfort letter to provide Rs 7,266 crore to Binani Industries Ltd for ending insolvency proceedings against Binani Cement.

"The company has in principle concluded commercial understanding with Binani Industries Ltd (BIL) for the purchase of 98.47% of the shareholding of BCL subject to termination of IBC proceedings," UltraTech Cement said in a stock exchange filing.

It added that the company's board has agreed to issue the comfort letter confirming that the company will provide funds to BIL amounting to Rs 7,266 crore, as offered to the Committee of Creditors (COC) in terms of the resolution plan submitted by it for acquiring BCL.

Binani Industries had approached UltraTech Cement for arranging funds to pay-off the lenders, debt and other liabilities, as admitted in the IBC proceedings against an offer for sale of its entire shareholding in Binani Cement.

It has requested UltraTech Cement to issue a comfort letter which will be used as a support in its application seeking termination of the Insolvency and Bankruptcy Code (IBC) proceedings.