Grappling with debt, UAE's JBF RAK in talks to sell Belgian plant -sources

JBF Industries

28/08/2017 13:00

By Tom Arnold 
    DUBAI, Aug 28 (Reuters) - JBF RAK, a United Arab Emirates 
subsidiary of Indian polyester maker JBF Industries  JBFI.NS , 
is in talks to sell its plant in Belgium for up to 250 million 
euros ($298 million) in an effort to settle part of its debt, 
sources familiar with the matter said. 
    The sale is one of a number of moves under discussion 
between the company and banks as JBF RAK seeks to re-negotiate 
around 2 billion dirhams ($545 million) in debt and turnaround 
its fortunes after it fell into financial problems earlier in 
the summer. 
    Banks have hired PricewaterhouseCoopers (PwC) to represent 
their interests, while JBF RAK has hired AlixPartners, said the 
sources. The advisers are working together to come up with a 
strategy for the company's future including examining the amount 
of debt it owes, as well as proposals on potential asset sales 
and a restructuring of management. 
    JBF RAK, PwC and AlixPartners did not respond to a Reuters 
request for comment. 
    JBF RAK stopped production of PET resin at its plant in the 
emirate of Ras Al Khaimah at the end of June after the company 
experienced a shortage of working capital, Chief Operating 
Officer Rohit Maindwal told Reuters on Aug. 10. The firm 
launched operations at its plant in Belgium in 2014 and also has 
a facility in Bahrain.  urn:newsml:reuters.com:*:nL4N1KW4E8 
    The sources said JBF RAK was considering selling the plant 
in Belgium to help repay some of its bank debt and was in talks 
with some interested parties, without disclosing further 
details. The plant was valued at between $200 million and $250 
million, the sources said. 
    JBF RAK has a 45 percent share of the market for PET chips 
in the six-nation Gulf Cooperation Council, according to the 
website of JBF Industries, which is among the top five global 
producers of PET chips. 
    PET, or polyethylene terephthalate, is used as a raw 
material for making packaging materials such as bottles and 
containers for packaging and other consumer goods. 
    In a statement earlier this month, parent JBF Industries, 
which is listed on India's National Stock Exchange, said it was 
working with its lenders to resolve cashflow issues, while it 
was also considering the sale or restructuring of overseas units 
to cut debt.  urn:newsml:reuters.com:*:nL4N1KW4E8 
    Another of the options being considered by JBF RAK to 
appease banks is the appointment of a new chief executive, the 
sources said. 
    Cheerag B. Arya, a prominent Indian businessman known for 
his collection of Ferrari cars, was out of the country, Maindwal 
told Reuters on Aug. 10. As of Monday, it was unclear whether he 
remained outside the UAE. 
 
($1 = 3.6730 UAE dirham) 
($1 = 0.8386 euros) 
 
 (Editing by David Evans) 
 ((Tom.Arnold@thomsonreuters.com; +97144536265; Reuters 
Messaging: tom.arnold.thomsonreuters.com@reuters.net)) 
 
Keywords: JBF RAK DEBT/