Jindal Poly Films gains after Brookfield agrees to pick minority stake in its packaging films biz.

17 Mar 2022 , 10:30 AM

The transaction will result in Jindal Poly Films (JPFL) carving out its packaging films business, which generates approximately 85% of its total revenue, into a wholly-owned subsidiary in which Brookfield Asset Management, through its Special Investments program (BSI), and together with institutional partners (collectively called Brookfield), will hold a minority stake. JPFL will continue to own its non-woven business unit and other corporate assets.

The equity investment in JPFL consists of compulsory convertible preference shares and equity shares of the new subsidiary, giving BSI a 25% stake and downside protection through a ratcheted equity structure tied to financial performance. BSI has also entered into an investor rights agreement.

The transaction is subject to customary approvals and is expected to close during the first half of fiscal year 2023.

The net profit of Jindal Poly Films jumped 10.53% to Rs 217.98 crore in the quarter ended December 2021 as against Rs 197.21 crore during the previous quarter ended December 2020. Net sales rose 27.15% to Rs 1,359.18 crore in the quarter ended December 2021 as against Rs 1,068.97 crore during the previous quarter ended December 2020.

Jindal Poly Films is engaged in diverse business activities including manufacturing of polyester film, polypropylene film, steel pipes and photographic products.

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