MOSCOW (MRC) -- Government-backed GAIL (India) emerged as the successful bidder for debt-laden JBF Petrochemicals, said Livemint.
GAIL's resolution plan received a 100% vote of the committee of creditors of JBF and thereby the approval has been granted. GAIL was among a host of major companies like ONGC, Reliance, Indian Oil and others that showed interest in JBF Petrochemicals which has defaulted against a bank loan of around ?5,000 crore.
GAIL participated in the process of Request for Resolution plan for JBF Petrochemicals in the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code 2016 (IBC).
In its regulatory filing, GAIL said, "the Resolution Professional in the matter of CIRP has informed that GAIL (India) Limited has been declared a Successful Resolution Applicant and GAIL's Resolution Plan received the affirmative vote of 100% of the members of the Committee of Creditors (CoC) by value and has been approved as per the requirements of the IBC."
Incorporated in September 2008, JBF Petrochemicals was set up with a view to commission a 1.25 million tonnes per annum capacity Purified Terephthalic Acid plant at Mangalore Special Economic Zone.
As per the JBF Industries website, the expected project cost stood at $750 million. The project received debt financing of USD464 million via ECB which was underwritten by IDBI Bank. Also, KKR invested USD150 million for the completion of the project.
However, the company is currently undergoing CIRP following the extant provisions of IBC and other relevant rules and regulations notified in the order dated January 28, 2022, of the NCLT Ahmedabad bench.
JBF Petrochemicals has defaulted against debt to the tune of around ?5,000 crore. IDBI Bank is said to have the highest exposure in the defaulted loan, while among other lenders are Indian Overseas Bank, Bank of Baroda, EXIM Bank and Union Bank of India.
As MRC reported earlier, GAIL (India) Ltd, India’s principal gas transmission and marketing company under the Ministry of Petroleum and Natural Gas, is on track to start up its propane dehydrogenation (PDH) facility and polypropylene (PP) plant in Usar, Maharashtra by 2024. GAIL has recently chosen Lummus Technology’s CATOFIN process and Clariant’s tailor-made catalysts for India’s first PDH plant. Its upcoming 500 kiloton per annum PDH facility in Usar will be integrated with the downstream polypropylene (PP) unit. The cost of PDH-PP project is estimated at USD1.2 B.
GAIL India Ltd is the country’s largest natural gas company, and one of seven Maharatna Public Sector Undertakings (PSUs) under the Government of India. Founded in 1984, the Delhi-based company operates in India and abroad in various segments such as transmission services, natural gas, petrochemicals, liquefied petroleum gas and other liquid hydrocarbons.