GAIL invests Rs 2,101 crore in debt-ridden JBF Petrochemicals

5 Jun 2023 , 10:05 AM

GAIL announced that it has invested Rs 2,101 crore in JBF Petrochemicals Ltd, an insolvent private-sector chemical company acquired by it in bankruptcy proceedings.

In March, the firm received bankruptcy court approval to take over JBF.

GAIL India said in its filing with the bourses that it has “invested Rs 2,101 crore, consisting of equity worth Rs 625 crore and a debt of Rs 1,476 crore in the bankruptcy resolution plan.”

GAIL’s bid has surpassed a consortium of Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) in an IDBI Bank-run insolvency process to recover Rs 5,628 crore in financial and operational creditors.

JBF Petrochemicals was founded in 2008 with the vision to establish a 1.25 million tonnes per year purified terephthalic acid plant in the Mangalore Special Economic Zone.

JBF collected funds from IDBI and other banks to build the PTA plant for USD 603.81 million, with BP providing technology and OMPL providing 50,000 tonnes of paraxylene feedstock per month.

The plant was set up in 2017 but stopped operating after it defaulted on payment of loans in the same year.

Lenders and operational creditors, including employees, raised a claim of Rs 7,918 crore in debt. However, the company admitted claims worth only Rs 5,628 crore in debt. This also includes debt of Rs 712 crore from operational creditors.

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