India Resurgence Fund, a joint venture of Bain Capital Credit and Piramal Enterprises Ltd, has invested $156 million (Rs 1,100 crore) in Chennai-based Archean Chemical Industries Pvt. Ltd.
The fund made the investment through debt and equity, it said in a statement.
Archean Chemical will use the proceeds to refinance its existing debt and make investment to optimise the output of its factory at Hajipir in Gujarat’s Kutch district.
It will also use the money as working capital to grow its market share in India and in export markets such as Japan, China, West Asia and Europe.
India Resurgence Fund will work with Archean’s management to implement a turnaround plan for the loss-making company.
The company posted a net loss of Rs 73.24 crore for the year through March 2017 on operating income of Rs 288.4 crore.
Archean Chemical is part of Archean Group, which has business interests across sectors including industrial salt, mining and minerals, and granites.
Archean Chemical was incorporated in July 2009. Its Hajipir factory produces sulphate of potash, industrial salt and bromine, according to a report by credit rating firm ICRA.
Shantanu Nalavadi, managing director at India Resurgence Fund, said the investment in Archean Group reiterates the fund’s robust outlook on the marine chemicals business.
This is at least the second time Archean Group has raised funding from a private equity firm. In 2014, Archean Group had raised an undisclosed amount in mezzanine funding from KKR.
For India Resurgence Fund, the transaction comes after its failed attempt to acquire Binani Cement Ltd through a joint venture with Dalmia Bharat Ltd. Binani Cement has been acquired UltraTech Cement Ltd.
The joint venture fund of Piramal Enterprises and the credit affiliate of PE firm Bain Capital aims to invest in distressed assets and special situations across sectors.
The fund's target corpus is $1 billion, according to Piramal's annual report.
In October, Ajay Piramal, chairman of Piramal Group, told The Economic Times the size of the fund was $300 million. Piramal Enterprises and Bain Capital Credit are separately committing $100 million each to the fund.
International Finance Corporation, the private sector investment arm of the World Bank, had invested $100 million in the fund.