New Delhi: India’s largest gas firm GAIL has infused Rs 2,100 crore in insolvent private-sector chemical company JBF Petrochemicals Ltd that it had acquired in bankruptcy proceedings.
The firm had in March won bankruptcy court approval for taking over JBF.
In a stock exchange filing, GAIL (India) Ltd said it has “infused Rs 2,101 crore (equity – Rs 625 crore and debt – Rs 1,476 crore)” in the committed bankruptcy resolution plan.
“Accordingly, JBF has become a wholly-owned subsidiary of GAIL with effect from June 1, 2023,” it said.
GAIL had outbid a consortium of Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) in the insolvency process run by IDBI Bank to recover Rs 5,628 crore of dues to financial and operational creditors.
JBF Petrochemicals was incorporated in 2008 to set up a 1.25 million tonne per annum capacity purified terephthalic acid plant at Mangalore Special Economic Zone.
IDBI and other banks had lent JBF money to build the PTA plant for USD 603.81 million with technology support from BP and 50,000 tonnes per month of the feedstock of paraxylene from state-controlled chemical producer OMPL.
The plant, which is a backward integration project for JBF Industries’ polyester plants, was commissioned in 2017 but stopped operations after the company defaulted on its loans in the same year.
The default led to the lenders dragging it to corporate insolvency and bankruptcy (IBC).
Lenders and operational creditors, including employees, claimed Rs 7,918 crore in dues but only Rs 5,628 crore in dues, including Rs 712 crore towards operational creditors were admitted.
Initially, three parties – a consortium of IOC-ONGC, MPCI Pvt Ltd and GAIL – submitted bids in August 2022 to acquire JBF.
They were asked to improve their financial proposals and cure defects. At the last date on September 22, 2022, revised resolution plans were received only from the IOC-ONGC consortium and GAIL, the NCLT order said.
GAIL has an existing petrochemical plant at Pata, Uttar Pradesh, with a polymers production capacity of 8,10,000 tonnes per annum. It is aiming to build a propane dehydrogenation plant in Usar, Maharashtra, by next year, which will have a nameplate capacity of 5,00,000 tonnes a year of polypropylene.
PTI
