PE Fund Investments
GAIL to take over JBF Petrochem in Rs.2,015-Cr deal
Lenders to the debt-laden JBF Petrochemicals have issued a letter of intent (LoI) to publicly listed PSU natural gas firm GAIL, giving a go-ahead for the take over of the company through the insolvency process. Gail's INR 2,015 crore offer was ahead of the INR 1,705 crore bid of a consortium of Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC) after two rounds of bidding. JBF Petrochemicals manufactures Purified Terephthalic Acid (PTA), used to make polyester value chain products used in consumer goods, textile and packaging industries such as PET bottles. The company has a 1.25-million tonne PTA plant in Mangalore. JBF Petrochemicals owes lenders USD 463 million (about INR 3,658 crore) in principal, primarily from external commercial borrowings and foreign currency term loans. IDBI Bank is the lead lender, with USD 252 million of loans outstanding. Other lenders include Exim Bank, Indian Overseas Bank, Bank of Baroda and Union Bank of India. Total outstanding, including debt, is close to INR 5,000 crore.
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