Beleaguered polyester and petrochemicals manufacturer JBF Industries Ltd has decided to sell its petrochemicals business to private equity firm KKR and Co. in a bid to stay the insolvency proceedings being initiated against it.
JBF Industries on Monday announced that it will be selling a 100% stake in JBF Petrochemicals Ltd to KKR Jupiter Advisors for an undisclosed amount.
The Reserve Bank of India had referred the name of JBF Industries to the banks for resolution. The central bank had fixed 27 August as the deadline for the account to be resolved outside the National Company Law Tribunal (NCLT), failing which the lenders would have initiated insolvency proceedings against the firm at the tribunal.
“The board of directors of JBF Industries has approved a scheme of arrangement involving debt restructuring to secured and unsecured lenders. The proposed repayment for the outstanding amount is in line with prevailing Reserve Bank of India guidelines,” the firm said in a stock exchange announcement.
As per the arrangement, the entire debt of $464 million on the books of JBF Petrochemicals will no longer be consolidated in the accounts of JBF Industries. “This will eliminate all contingent liabilities in the form of guarantees provided to the lenders of the PTA project for a loan of $464 million and interest thereon,” the firm said.
JBF’s offerings include polyester chips, bottle grade PET and polyester textured yarn, among others. The petrochemicals business has a PTA (Purified Telephthalic Acid) project in Mangalore. PTA is used across industries such as paints, polyester fibre etc.
JBF Petrochemicals will also be returning another ₹450 crore to JBF Industries for settlement of inter corporate deposit provided by JBF Industries.
“The funds will be used for repayment of debt (in part) to banks and the balance will be for working capital. The infusion of working capital funds…will help bolster the company’s operations to full capacity over the next two quarters, and will result in added profitability, aided by strong margins in various polyester products of JBF Industries,” the firm said.
By Malvika Joshi
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?