India Resurgence Fund, a joint venture between Piramal Enterprises Ltd and Bain Capital Credit, on Monday said it has invested $156 million in the marine chemicals business of Chennai-based Archean Group. The investment proceeds will be used to repay debt, offer capital investment to optimize output across product lines, and provide working capital to grow market share in India and in major export markets such as Japan, China, Middle East and Europe.
“We are pleased to partner with the Archean Group, which reiterates our robust outlook on the marine chemicals business,” Shantanu Nalavadi, managing director at India Resurgence Fund, said in a statement.
“This, coupled with the company’s globally competitive position, will facilitate IndiaRF to work closely with the promoters and the management team, to steer the company towards an accelerated expansion, growth and profitability path,” he added.
The fund has invested both through debt and equity, and offered repayment terms such that the initial years’ cash flows are reinvested into growing the business. The capital is to be returned once the turnaround is fully implemented. Mint had first reported in June that the Bain-Piramal fund has made an investment in Archean Chemical Industries Pvt. Ltd through a structured deal.
Archean Chemical has been struggling to service its debt following a delay in achieving full operating capacity, resulting in cost overruns and incremental losses and an unfavourable debt repayment schedule.
Archean Chemical claims to be India’s largest producer and exporter of industrial salt and bromine. Founded in July 2009, it owns and operates an integrated marine chemicals complex in Kutch, Gujarat. The plant produces the sulphate of potash fertiliser, industrial salt and bromine. The integrated complex uses the available brine flowing over marine mineral deposits in the Rann of Kutch.
The chemical manufacturer is part of the Archean Group, which has business interests across building materials, mining and minerals, industrial chemicals and fertilizers, shipping and shipbuilding, oil and gas, and renewable energy.
India Resurgence Fund invests in distressed assets and special situations in India across sectors barring real estate. According to its website, the fund looks “to invest in businesses that require balance sheet restructuring with a focus on debt restructuring.”
Source: Mint