India's largest gas firm GAIL (India) Ltd on Thursday, June 8, said the company has released payment to all stakeholders of insolvent private sector chemical company JBF Petrochemicals Ltd (JBFPL) and has completed the corporate insolvency resolution process (CIRP) in 15 months.

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The company, in an exchange filing, said the transaction closure of JBF Petrochemicals Ltd is one of the fastest in the history of the National Company Law Tribunal (NCLT) in the post-COVID period.

It has already infused a total resolution plan amount of Rs 2,101 crore and acquired a 100 percent stake in JBFPL. Accordingly, JBFPL has become a wholly-owned subsidiary of GAIL with effect from June 1, 2023.

GAIL had outbid a consortium of Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) in the insolvency process run by IDBI Bank to recover Rs 5,628 crore of dues to financial and operational creditors.

JBF Petrochemicals was incorporated in 2008 to set up a 1.25 million tonne per annum capacity purified terephthalic acid (PTA) plant at the Mangalore Special Economic Zone.

IDBI and other banks had lent JBF money to build the PTA plant for $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 IBC.

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. On the last date — September 22, 2022 — revised resolution plans were received only from the IOC-ONGC consortium and GAIL, the NCLT order said.

GAIL has an existing petrochemical plant at Pata, Uttar Pradesh, with a polymer production capacity of 8,10,000 tonnes per annum. It is aiming to build a propane dehydrogenation plant in Usar, Maharashtra, by next year, which will have a nameplate capacity of 5,00,000 tonnes a year of polypropylene.

Shares of GAIL (India) Ltd ended at Rs 104.80, down by Rs 0.90, or 0.85 percent on the BSE.

(Edited by : Shoma Bhattacharjee)

First Published:Jun 8, 2023 5:59 PM IST