International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, plans to invest an undisclosed sum to part-fund a $43.6 million (Rs 233 crore) expansion project of privately held Laxmi Organic Industries Ltd, a Mumbai-based company producing specialty chemicals used in diverse industries.
The proceeds will be used for expanding ethyl acetate and diketene derivatives products capacities, a coal-fired co-generation facility and a greenfield facility to produce acetic anhydride.
IFC has not disclosed whether it is going to acquire equity stake in the firm or commit money as debt for the project. For the rest of the fund requirement, the company will raise monies from other financial institutions besides internal accruals.
The site for the expansion project is Mahad, Maharashtra, where the company’s existing plant is located.
Incorporated in 1990 by Vasudev Goenka, Laxmi Organic manufactures ethyl/butyl acetates and diketene derivatives in India. Currently, the company has the capacity to produce 60,000 tonnes of acetic acid and 50,000 tonnes of ethyl/butyl acetate per year.
Laxmi Organics clocked a total income of Rs 215 crore with net profit of Rs 9.6 crore for the year ended March 2010, as per VCCedge, the financial research platform of VCCircle.
The proposed investment adds up to IFC’s India exposure. IFC has committed more than $500 million in Indian companies across various segments through a mix of equity and debt in 2011. Some of its key initiatives this year include investments in Himadri Chemicals & Industries, Kalyani Gerdau Steels, Dunar Foods, PTC India Financial Services and Bandhan Financial Services.
In another deal in speciality chemical space, Vinati Organics Ltd, a BSE-listed manufacturer of pharmaceutical input and specialty chemicals, raised $5 million from IFC through subscription of foreign currency convertible bonds (FCCBs) four months ago.
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