The agreement will result in JPFL carving out its packaging films business to form a new wholly-owned subsidiary in which BSI will hold a 25% stake
BSI along with institutional partners will buy a 25% stake in a new unit that Jindal Poly Films will carve out. (Credit: Gerd Altmann from Pixabay)
Jindal Poly Films Limited (JPFL) has agreed to sell a minority stake in its packaging films business to Canadian investment firm Brookfield Asset Management for INR20bn (around $263m).
The agreement will result in JPFL carving out its packaging films business to form a new wholly-owned subsidiary in which Brookfield Special Investments (BSI) programme will hold a 25% stake. India-based JPFL will retain 75% ownership of the new unit.
JPFL will continue to own its non-woven business unit and other company assets.
JPFL CEO Vinod Kumar Gupta said: “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. The transaction is a testament to JPFL’s leadership position and growth potential.
“Brookfield’s presence on the board of this new subsidiary will also facilitate benchmarking to international governance standards and best practices.”
JPFL is engaged in the manufacturing of flexible plastic films and non-woven fabrics products. It also provides a full suite of products, including BOPP, BOPET, CPP, and other specialised films.
The company’s products are used in packaging for food and cosmetics, labels, tapes, and various other industrial segments.
Brookfield’s Special Investments Business managing director Dev Santani 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.
“Special Investments Business is sector agnostic and invests in large-scale, non-control (minority) investments where we can provide capital and be a strategic partner to leading companies. We intend to continue to scale our Special Investments Business in India and be a partner of choice.”
The deal is scheduled to conclude in the first half of the fiscal year 2023, subject to customary approvals.