Reliance Industries, an HPCL-Lakshmi Mittal joint venture and two Jindal group companies are among seven entities that have shown interest in buying bankrupt JBF Petrochemicals, a purified terephthalic acid (PTA) manufacturer with outstanding debt of ₹4,700 crore, according to multiple sources.
Others said to be in the running are a consortium of ONGC and Indian Oil, GAIL,, and MCPI, a Kolkata-based company that is the second-largest producer of PTA in the country after Reliance Industries. The two Jindal group companies include one run by Naveen Jindal and the second by his uncle BC Jindal.
The list of those interested could expand to as many as 12 by May 30 when the final tally is compiled by the company’s resolution professional Sundaresh Bhatt, according to the people cited above. Others likely in the fray include Shanthi Gears and CFM ARC, according to them.
PTA is an industrial chemical used for manufacturing textiles, food-grade plastics and bottles. It is also used as a coating in the paint and steel industries.
RIL, HPCL-Mittal Energy, Naveen Jindal-controlled Jindal Power and BC Jindal Group company Jindal Poly Films didn’t respond to queries. Neither did ONGC, Indian Oil, GAIL, MCPI and Shanthi Gears. CFM ARC could not be reached for comment. Bhatt declined to comment.
KKR-backed JBF Petrochemicals was admitted to the National Company Law Tribunal (NCLT) in January after an out-of-court settlement between lenders and Reliance Industries in partnership with asset reconstruction company Assets Care & Reconstruction Enterprise collapsed, according to sources. Lenders had initiated talks with ONGC and GAIL prior to the company’s admission into the bankruptcy process but those did not progress.
IDBI Bank, Union Bank of India, Bank of Baroda, Indian Overseas Bank and EXIM Bank are the company’s secured lenders. IDBI Bank accounts for 50% of the outstanding debt of the company.
Last year, the lenders invited bids for $463.38 million (₹3,460 crore) debt and 51% equity of JBF Petrochemicals, as reported by ET on February 7. However, negotiations with Citex Energy, which offered $190 million, and ACRE, which offered $160 million, did not progress since the lenders found their offers below expectations.
JBF Petrochemicals set up a 1.25 million tonne per annum PTA plant in Mangalore, Karnataka, at an estimated cost of $603.8 million. JBF Industries set up the backward integration project in partnership with KKR to source PTA. KKR, which had originally invested in JBF Industries, had planned to acquire JBF Petrochemicals but that deal fell through.
Separately, 98% of the lenders of JBF Industries exited by selling their loan exposure to CFM ARC last year. Listed JBF Industries does not directly own any stake in JBF Petrochemicals.
