New Delhi: India's largest gas firm GAIL has won a nod from the National Company Law Tribunal (NCLT) to acquire insolvent private-sector chemical company JBF Petrochemicals Ltd for Rs 2,079 crore, helping the state-owned firm expand its footprint in the petrochemical business.
In a filing, GAIL (India) Ltd said that the Ahmedabad bench of the NCLT has approved the resolution plan it had submitted after JBF was auctioned by lenders to recover unpaid dues.
GAIL had outbid a consortium of Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) in the insolvency process which was undertaken by the IDBI Bank to recover Rs 5,628 crore of dues to financial and operational creditors.
"Resolution plan of GAlL (India) Limited has been approved by NCLT, Ahmedabad," it said. "The closing of the transaction is yet to take place and we are in process of implementation of the Resolution Plan in terms of the schedule as approved by the NCLT, Ahmedabad Bench," it added.
IDBI and other banks had lent money to JBF to build the PTA plant for USD 603.81 million with technology support from BP and 50,000 tonnes per month of the feedstock of paraxylene from state-controlled chemical producer OMPL. The plant, which is a backward integration project for JBF Industries' polyester plants, was commissioned in 2017 but stopped operations after the company defaulted on its loans in the same year.
The default led to the lenders dragging it to corporate insolvency and bankruptcy (IBC).
Lenders and operational creditors, including employees, claimed Rs 7,918 crore in dues but only Rs 5,628 crore in dues, including Rs 712 crore towards operational creditors were admitted.
Initially three parties, a consortium of IOC-ONGC, MPCI Pvt Ltd and GAIL - submitted bids in August 2022 to acquire JBF. They were asked to improve their financial proposals and cure defects. At the last date on September 22, 2022, revised resolution plans were received only from the IOC-ONGC consortium and GAIL, the NCLT order said.
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