As per latest buzz Reliance Industries Ltd (RIL) is the only contender to acquire a part of JBF Industries polyester manufacturing operations in a bid that will include its entire overseas operations and an upcoming plant in Mangalore. The company were in talks with private equity fund KKR — which owns around 20 per cent in the company along with a part of the company’s debt.
The framework of the deal has changed since discussions started. If the transaction does not fall through, RIL will acquire controlling stake in the Singapore subsidiary of JBF, which owns the overseas assets and the Mangalore PTA plant, while local operations of JBF group will remain with the promoters of the company.
JBF group is the second-largest manufacturer of textile-grade chips and the third-largest producer of partially-oriented yarn and biaxially-oriented polyethylene terephthalate (BOPET) chips and films locally. The group is among the top 10 BOPET chip and film producers globally through its foreign subsidiaries including JBF RAK LLC, JBF Global Europe BVBA and JBF Bahrain SPC.
The group is also commissioning a 1.25 MMT per annum capacity PTA (purified terephthalic acid) plant, which will be amongst the largest of its kind in India. For the PTA project, which will cost up to $750 million, JBF has raised external commercial borrowings (ECBs) of $464 million and received investment from private equity firm KKR, which has invested $150 million to complete the project.
A RIL spokesperson has said they will continue to make necessary disclosures in compliance with obligations under Securities Exchange Board of India’s (Sebi) regulations and their agreements with the stock exchanges. JBF’s total consolidated debt was at Rs 10,848.53 crore as of March 2017. Previous reports had suggested, JBF RAK, the UAE subsidiary of JBF Industries, were in talks to sell their plant in Belgium for up to $298 million in an effort to settle part of their debt. The proposed sale was one of a number of moves under discussion between the company and banks to renegotiate around $545 million in debt.