Brookfield picks up minority stake in Jindal Poly Films for Rs 2,000 crore
Jindal Poly Films, a manufacturer of flexible plastic films and non-woven fabrics, has entered into an agreement to sell a minority stake in its packaging films business to Brookfield Asset Management for Rs 2,000 crore.
The US-based asset manager will acquire the stake through its special investments programme, along with its other institutional partners.
Jindal Poly Films (JPFL) will carve out its packaging films business as a wholly-owned subsidiary. Brookfield and the other investors will pick up a minority stake in this subsidiary.
The poly films business generates nearly 85% of the total revenues. JPFL will continue to own its non-woven business unit and other corporate assets.
The structured equity investment in JPFL consists of compulsory convertible preference shares and equity shares of the new subsidiary, giving Brookfield Special Investments (BSI) a 25% stake and downside protection through a ratcheted equity structure tied to financial performance. BSI has also entered into an investor rights’ agreement.
Commenting on the agreement, Dev Santani, managing director of BSI, said: “We are pleased to partner with JPFL, India’s leading manufacturer of flexible plastic films for the packaging industry, which plays an essential role in the preservation and hygiene of products in different sectors such as food and healthcare. In partnership with Jindal, we aim to help the company maintain its strong track record of growth.”
We are proud to enter a strategic partnership with a large global investor such as Brookfield. Having access to their international network greatly broadens our horizons,” Vinod Kumar Gupta, CEO of JPFL, said. “Brookfield’s presence on the board of this new subsidiary will also facilitate benchmarking to international governance standards and best practices,” he added.
Brookfield’s Special Investments programme is sector-agnostic and invests in large-scale, non-control (minority) investments where it can provide capital and be a strategic partner to leading companies.