Fairfax in talks to invest about $300 mln in India's Sanmar-sources

Privi Speciality Chemicals

07/04/2016 23:51

By Devidutta Tripathy and Krishna N. Das 
    MUMBAI, April 8 (Reuters) - Fairfax India Holdings Corp 
 FIHu.TO  is close to acquiring a minority stake in 
privately-held Indian petrochemical company Sanmar Chemicals 
Group via a roughly $300 million investment in the company, 
according to two sources familiar with the matter. 
    The investment in Sanmar, may be paired with a smaller cash 
infusion from Fairfax India's larger sister entity, Fairfax 
Financial Holdings Ltd  FFH.TO . That would give the two 
entities - both chaired by Canadian billionaire Prem Watsa - a 
roughly 30 percent stake in Sanmar, said the two sources, who 
declined to be named as the talks are private. 
    The sources said Fairfax may consider investing in both the 
equity and debt of Sanmar.  
    Fairfax India and Fairfax Financial declined to comment on 
the matter. A spokesman for Chennai-based Sanmar was also not 
immediately able to provide a comment on the matter. 
    The Times of India, in February, reported that Fairfax was 
in talks to buy a stake in Sanmar. 
    Indian-born Watsa, whose main investment firm is Fairfax 
Financial Holdings, set up Fairfax India in 2014 to hone in on 
investments in India, where he sees strong growth opportunities. 
Fairfax India went public in early 2015 and raised more than $1 
billion via its initial public offering. 
    Watsa, who met with Indian Prime Minister Narendra Modi last 
year, has previously stated he is enthused about India's growth 
prospects due to Modi's economic reform agenda.  urn:newsml:reuters.com:*:nL2N0XE009 
    The investment in Sanmar would be the latest in a string of 
Fairfax investments in the country this year. Last month, it 
agreed to buy a 33 percent equity interest in the Bangalore 
International Airport from GVK Power and Infrastructure Ltd 
 GVKP.NS  for $321 million. 
    In February, it acquired a 45 percent stake in ADI Finechem 
 ADIF.NS , a small Ahmedabad-based specialty chemical company 
for $19 million. This followed its acquisition last August of a 
majority stake in India's largest non-government grain handling 
company, National Collateral Management Services Ltd for about 
$126 million.  urn:newsml:reuters.com:*:nL8N0ZB2MK 
    Sanmar, a family-owned firm chaired by N. Sankar, is one of 
India's largest producers of polyvinyl chloride (PVC). The firm, 
which owns manufacturing facilities in India and Egypt, is also 
a manufacturer of caustic soda and other specialty chemicals. 
      
 
 (Additional reporting by Euan Rocha in Toronto; Editing by 
Diane Craft) 
 ((euan.rocha@thomsonreuters.com; +1 416 941 8185; Reuters 
Messaging: euan.rocha.reuters.com@reuters.net)) 
 
Keywords: SANMARGROUP FAIRFAX INDIA/DIVESTITURE