GAIL says JBF Petrochemicals buy will help reduce import dependencies for PTA
GAIL (India), which recently acquired JBF Petrochemicals (JBFPL) through corporate insolvency resolution process, has said its foray into Purified Terephthalic Acid (PTA) manufacturing will provide a decisive push to domestic manufacturing sectors of textiles and PET chips. These industries are major consumers of PTA thereby reducing significant import dependencies.
The company in a statement said that the acquisition of JBF Petrochemicals offers GAIL an opportunity to add a new product PTA to GAIL’s existing petrochemical portfolio. “GAIL is looking forward to revive the business operations of JBF Petrochemicals and is committed to turn it around as a thriving manufacturing entity,” it said in an exchange filing.
GAIL (India) Limited became one of the few PSUs to have emerged as the successful bidder in the corporate insolvency resolution process (CIRP). GAIL’s resolution plan was approved by lenders of JBFPL and subsequently by the National Company Law Tribunal (NCLT) on 13 March 2023.
The PSU firm has already infused the resolution amount of Rs. 2,101 crores, thus acquiring 100% stakes in JBFPL with JBFPL becoming a wholly-owned subsidiary of GAIL. The company claims that the successful pay outs and transaction closure is one of the fastest in the history of NCLT post-Covid period.
“The cost of acquisition is significantly lower than a greenfield project of similar magnitude. Further, all the erstwhile creditors, including Employees and Workmen of JBFPL have been paid their claims as per the order of the NCLT,” the GAIL said in a statement.
JBF Petrochemicals, a subsidiary of polyester producer JBF Industries, was set up in September 2008 to operate a planned 1.25 million metric tonnes per year purified terephthalic acid (PTA) plant at Mangalore, Karnataka. The plant, a backward integration project of JBF Industries’ polyester. plant, was about to be commissioned in 2017 but ceased operations after JBFPL defaulted on a loan that same year, On February 1, 2022, JBF Petrochemicals! lenders, led by IDBI Bank, initiated insolvency proceedings for JBFPL.
Also Read: GAIL (India) infuses Rs 2,101 crore in JBF Petrochemicals
