M&A

M&A

ONGC, GAIL in race to buy KKR-backed JBF Petrochem

Economic Times  

Oil and gas explorer ONGC and natural gas transmission and marketing company GAIL India have separately initiated talks with lenders of KKR-backed JBF Petrochemicals to explore the possibility of acquiring the distressed company. These offers have come within months of Assets Care & Reconstruction Enterprise (ACRE) and Dubai-based entity Citax Energy giving indicative offers to the lenders. The state-owned companies have met lenders of JBF Petro and sought time to make a firm offer. ACRE, an asset reconstruction company in which Ares SSG Capital holds a majority stake, has given a cash offer of USD 160 million (about INR 1,188 crore) to lenders to acquire the company, while Citax has offered USD 190 million (INR 1,411 crore). BoB Capital Markets, the process advisor for lenders, invited potential bidders for lenders' exposure of USD 463.38 million (INR 3,444 crore) as of September 30, 2020. Bhagirath Arya and family-promoted JBF Petro partnered with private equity firm KKR to set up a 1.25 million tonne per annum PTA plant in Mangaluru. A delay in the construction of the plant led to cost overrun, resulting in the delay in repayment of loans. The plant was not completed and has been shut since 2017. Done Deals