GAIL makes highest bid for JBF Petro at ₹1.8k cr

GAIL has emerged as the highest bidder for JBF Petrochemicals with a ₹1,800-crore resolution plan that is the best of the three offers received for the bankrupt company at the expiry of the August 30 bid deadline, sources in the know told ET.

GAIL has outbid an ONGC-Indian Oil consortium and the Kolkata-based MCPI, the two other bidders.

ET had first reported on May 27 that seven expressions of interest had been received for JBF Petrochemicals including from Reliance Industries, Lakshmi Mittal-HPCL JV, two Jindal companies, Haldia Petrochemicals group company MCPI, and a consortium of ONGC and Indian Oil Corp.


Reliance Industries, which was widely expected to bid for the company, has not come up with a concrete offer.

The three bids were opened at a meeting of the company's creditors on Thursday.

GAIL's resolution plan includes an upfront payment to lenders, a fresh infusion of funds into the company to revive its operations and tenuring of part of the liabilities into longer-term debt, the sources said.

As per the law, the three final bidders could be allowed one more chance to better their bids.

GAIL and JBF Petrochemicals resolution professional Sundaresh Bhatt did not respond to ET's queries.

JBF Petrochemicals owes an IDBI Bank-led group of lenders ₹4,700 crore. KKR Jupiter Investors is also one of the lenders, though its loan of about ₹300 crore is unsecured.

JBF Petrochemicals was admitted for bankruptcy proceedings on January 28.

The lenders had attempted an out-of-court settlement with Reliance Industries in partnership with an asset reconstruction company - Assets Care and Reconstruction Enterprise (ACRE) - before the company's admission into insolvency proceedings, but the attempts didn't fructify.

JBF Petrochemicals has set up a 1.25 million tonne per annum purified terephthalic acid (PTA) plant in Mangaluru, Karnataka, at an estimated cost of $603.8 million. It is a backward integration project set up in partnership with private equity firm KKR to supply PTA to JBF Industries. KKR had originally invested in JBF Industries and had planned to acquire JBF Petrochemicals, but that deal fell through.

PTA is an industrial chemical used for manufacturing textiles, food-grade plastics and bottles. It is also used as a coating in the paints and steel industries. Given its uses in consumption-driven sectors, it is in high demand.