Meghmani gives successful exit to IFC from its subsidiary Meghmani Finechem
May. 2, 2018
MAPL acquired 24.97% equity stake held by IFC in Meghmani Finechem Limited (MFL) for a consideration of Rs221.2cr. This provides a successful return of ~4.17x to IFC which invested Rs530cr in MFL in 2008.
In 2008, MOL had brought in IFC, a member of the World Bank Group, as a strategic investor in its Basic Chemicals business. The fund made an investment of Rs46.1cr in MFL for setting up of a cutting edge environmental-friendly Caustic Chlorine project using energy efficient membrane cell technology. In 2012, IFC further invested Rs69mn on Rights basis to further expand the capacity of the plant. IFC had also provided a long-term loan of Rs80cr to the project, which has been fully paid. IFC was instrumental in strengthening the project’s technology and environmental-friendly operating standards.
Today MFL’s Caustic Chlorine capacity is 1,60,000 MTPA and is operating at a high utilization of 88% (9mFY18). The plant is the flagship for MOL’s Basic Chemicals business which posted revenues of Rs397.8cr in 9mFY18, up 36% yoy. Given the strong demand for Basic Chemicals, both in India and globally, the Caustic Soda plant capacity in MFL is currently being upgraded to 2,50,000 MTPA as part of the group’s Rs0.54cr capex announced in FY18.
Ankit Patel – Chief Executive Officer of MOL said, “We are happy for MAPL the wholly owned subsidiary of MOL buying complete stake of IFC in our Basic Chemicals subsidiary (MFL). Our foray into Basic Chemicals has been instrumental in the strategic growth of MOL. This segment has been demonstrating robust growth with strong demand drivers in place. We are confident of further success as we enter the second phase of growth with the recently announced Rs0.54cr expansion in Basic Chemicals. We would like to thank IFC for their support which has enabled us to achieve strong leadership in the segment.”