Fairfax to invest US$300 mln in Indian petrochemical giant Sanmar Chemicals Group

13-Apr-16

Fairfax India Holdings Corporation is set to invest US$300 mln in Indian petrochemical giant Sanmar Speciality Chemicals Limited, a Sanmar Chemicals Group, through a mix of equity and fixed income instruments. While Fairfax India will fund an initial sum of US$250 mln upon the closing of the deal, the remaining amount of US$50 mln will be paid within 90 days by Fairfax Financial Holdings or another investor. Headed by N. Sankar, family-owned Sanmar is one of India's biggest producers of polyvinyl chloride (PVC). The company has manufacturing facilities in India as well as Egypt. Currently, Sanmar is in the process of increasing its PVC capacity in Egypt from 200,000 tons to 400,000 tpa. Post deal completion, Sanmar will have a total PVC capacity of over 700,000 tpa. Thereafter, it will become one of the largest PVC manufacturers in the world. Post the deal, Fairfax India Holdings Corp, which is a unit of Prem Watsa's Fairfax Holdings, will have 30 per cent equity ownership in Sanmar. Besides, it will also generate a fixed return on its investment