UAE firm JBF RAK seeks to renegotiate 2 bln dirhams of debt-sources

JBF Industries

06/08/2017 12:13

By Hadeel Al Sayegh and Tom Arnold 
    DUBAI, Aug 6 (Reuters) - Manufacturer JBF RAK, which is 60 
percent owned by the United Arab Emirates' Ras al-Khaimah 
Investment Authority (RAKIA), is in talks with banks about 
renegotiating around 2 billion dirhams ($544.6 million) of debt, 
banking sources told Reuters. 
    The polyester producer, which according to its website is an 
affiliate of India's JBF Group  JBFI.NS , has contacted lenders 
about reviewing its debt obligations, said the sources, who 
spoke on condition of anonymity as the matter is not public. 
    JBF RAK and RAKIA did not respond to a Reuters request for 
comment. 
    JBF RAK manufactures a synthetic fibre and resin which is 
spun into fabrics but also moulded into disposable bottles for 
beverages, shampoo and liquid soap.  
    One of the sources said JBF RAK, which has relationships 
with 19 banks, is seeking to extend maturities on outstanding 
bank liabilities of around 1.96 billion dirhams. Bankers are 
hoping that the company will get support from RAKIA, its other 
owner, the source said. 
    The company may also seek a restructuring, but no decision 
has been taken yet, according to a second banking source.  
    The latest financial statements on the Group's website show 
JBF RAK recorded an annual loss of 110.03 million dirhams  
($29.96 million) for the year ended Mar. 31 2016, compared to a 
profit of 1.44 million dirhams a year earlier.  
    JBF RAK is one of five plants owned by JBF Group. The others 
are located in India, Belgium and Bahrain. The group, which is 
listed on India's National Stock Exchange, said on Aug. 3 its 
board was planning to discuss the sale or restructure of the 
overseas subsidiaries of the company, without elaborating. 
 urn:newsml:reuters.com:*:nFWN1KP0V2 
    JBF Group was downgraded to a 'D' default rating by credit 
rating agencies due to delays in servicing its debt, a company 
filing shows. It did not name the agencies. 
    India Ratings and Research, which has downgraded the company 
to D, said on July 27 the downgrade was on "account of a 
significant deterioration in the group's financial risk profile, 
resulting from losses in overseas operations". 
    Recent policy changes by the Indian government, which 
include a new goods and services tax and 2016's demonetisation 
push, has stirred protest and shutdowns in the "domestic 
unorganised textile segment", the group said in a disclosure in 
response to the downgrades.  
    "This has resulted in the cash flows of the company to be 
severely affected and delays in servicing some of its debt 
obligation with the lenders," the group said. 
    Global private equity giant KKR in 2015 invested $150 
million to buy a 20 percent stake in JBF Group. 
 
    ($1 = 3.6725 UAE dirham) 
 
 (Editing by Catherine Evans) 
 ((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;)) 
 
Keywords: JBF RAK DEBT/