KKR to acquire Indian petrochemicals maker

The deal is expected to close by the end of September, according to a statement, following which JBF Petrochemicals' $464 million debt will no longer be consolidated to JBF's balance sheet. JBF Petrochemicals will also pay its parent INR4.5 billion ($64 million), which will settle intra-corporate deposits and also provide it with working capital.

The sale is part of a debt restructuring plan proposed by JBF to its creditors after the Reserve Bank of India had set August 27 as the deadline for the parties to reach a repayment agreement in order to avoid insolvency proceedings. Currently JBF's debt is reportedly around INR110 billion.

KKR is already a shareholder in JBF, having invested $150 million in 2015 for a 20% stake in the parent and a 14.5% stake in its subsidiary JBF Global. The purchase of JBF Petrochemicals will be made by KKR Special Situations Fund II, which also made the earlier investment.

JBF's product line includes polyester chips, polyester yarn, and films, which are used in the fast-moving consumer goods, textiles, and packaging industries. The petrochemicals division is developing a factory in Mangalore to produce purified terephthalic acid (PTA), an important chemical in polyester production that JBF must currently import from Southeast Asia.

JBF's business has suffered in recent years due to rising prices for crude oil and PTA on the global market. The company reported revenue of INR37 billion for the year ended March 2018, down from INR44 billion the year before. Over the same period net profit fell from INR350 million to a net loss of INR1.2 billion.

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• Topics
• South Asia
• Industrials
• Buyouts
• India
• manufacturing
• KKR