KKR Jupiter Advisors agrees to buy 100% stake in JBF Petrochemicals
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 RBI guidelines. The Scheme will involve complete disinvestment of its wholly owned subsidiary, JBF Petrochemicals, which owns a PTA project in Mangalore.Towards this end, JBF Industries and KKR Jupiter Advisors (KKR) have entered into a binding understanding. Based on the Term Sheet executed on 14 August 2018 wherein KKR has agreed to buy out a 100 percent stake of JBF Petrochemicals. The total debt of $ 464 million in JBF Petrochemicals will now 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 USD 464 million and interest thereon. The financial closure of JBF Petrochemicals is scheduled by 30 September, 2018.
Further, an amount of INR 450 Cr. will be retumed by JBF Petrochemicals to JBF Industries, in settlement of the Inter Corporate Deposit provided by JBF Industries. The funds will be used for repayment of debt (in part) to Banks and balance for working capital.
The infusion of Working Capital Funds as mentioned above will help bolster the Company's operation 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.
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