GAIL invests Rs 2,100 cr in JBF Petrochemicals Limited

by Psu Connect
Date: 03-06-23

The investment by GAIL is expected to give a boost to the chemical industry in India, as well as help GAIL expand its portfolio of products and services.

GAIL invests Rs 2,100 cr in JBF Petrochemicals Limited

GAIL Limited is a central public sector undertaking under the ownership of the Ministry of Petroleum and Natural Gas, Government of India.

New Delhi: GAIL, India's largest gas company, has made a significant investment of INR 2,100 crore ($283.7m) in JBF Petrochemicals Ltd, a private sector chemical company that it had acquired through bankruptcy proceedings.

In a company filling GAIL said, that as per the approved Resolution Plan, GAIL (India) Limited has infused Rs. 2, 101 crores (Equity - Rs. 625.00 crores and Debt - Rs 1,476.00 crore) towards Total Resolution Plan amount in JBF Petrochemicals Limited (JBFPL) on 01.06.2023.

Pursuant to the implementation of Resolution Plan:

a) 100% of the existing issued, subscribed and paid-up share capital of JBF Petrochemicals Limited (JBFPL) stands cancelled and extinguished;

b) New equity shares have been issued and allotted to GAIL (India) Limited against the equity contribution of Rs. 625.00 crore. Accordingly, JBFPL has become a wholly-owned subsidiary of GAIL with effect from 01.06.2023.

This investment makes JBF a wholly-owned subsidiary of GAIL, and it comes after JBF had become bankrupt in 2017, after defaulting on its loans. GAIL outbid a consortium of Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) to acquire JBF, which was incorporated in 2008 to set up a purified terephthalic acid plant at Mangalore Special Economic Zone with a capacity of 1.25 million tonnes per annum.

The investment by GAIL is expected to give a boost to the chemical industry in India, as well as help GAIL expand its portfolio of products and services.