Fairfax India invests $300m in Sanmar Chemicals

According to a statement, Fairfax India will acquire a 30% stake in Sanmar through a transfer combining equity and fixed income securities. This will be delivered in two tranches with an initial investment of $250 million to be completed in the second quarter of 2016 upon the establishment of a term loan facility for $280 million between Sanmar and its Egyptian subsidiary.

The capital will support a doubling of Sanmar's PVC production capacity in Egypt to 400,000 tons per annum - a move which is expected to establish the company as one of the largest PVC companies globally. Fairfax is looking to leverage growing demand for PVC in emerging markets of India, the Middle East and Europe.

The investment extends a string of activity for the firm, including the purchase of a 44.7% stake in chemical company ADI Finechem for INR1.3 billion ($19.6 million) late last year and a INR21.5 billion investment in Bangalore International Airport two weeks ago. Fairfax took a 33% interest in the airport operator from Indian conglomerate GVK Power and Infrastructure as part of a long-term expansion plan aimed at constructing a new terminal and runway.

Toronto-listed Fairfax established its Indian investment unit in February last year with the raising of $1 billion in a combined IPO and private placement. Cornerstone investors included Markel Corporation and West Street Capital as well as funds and accounts advised by Fidelity.

Fairfax India targets acquisitions that achieve control or significant influence positions in both Indian companies and India-dependent foreign businesses. Early investments included an INR16 billion commitment for a 26% stake in IIFL Holdings. The firm posted net earnings for the 2015 financial year of $40.9 million.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Industrials
• Expansion
• India
• Chemicals
• manufacturing