uae's jbf rak pet output stalls amid debt restructuring - coo - pet resin
Jbf rak, an UAE subsidiary of Indian polyester manufacturer JBF Industries, expects to resume production of PET resin as soon as next month after the group's financial problems have been disrupted, a senior company official said.
Rohit Maindwal, chief operating officer of jbf rak, told Reuters by phone on Thursday: "The restructuring negotiations with the bank are underway and the results will benefit all stakeholders . ".
The company is renegotiating about 2 billion dirhams with the bank ($544. 6 million)
Bank sources told Reuters earlier this week that the debt problem.
Maindwal declined to confirm the amount negotiated with the bank or to comment on the progress of the negotiations.
Jbf rak exports around the world, with a 45% share in the pet chip market in six countries
According to the JBF Industries website, the National Gulf Cooperation Council is one of the world's five largest pet chip manufacturers.
PET, also known as polybenzene Diester, is used as a raw material for the manufacture of packaging materials, such as bottles and containers for packaging various foods and other consumer goods.
Maindwal said that jbf rak stopped PET production at its factory in the emirate of Ras Al Khaimah at the end of June after the company experienced a shortage of working capital.
"PET was temporarily shut down at the end of June because we expect the supply of raw materials for our Indian customers to start in September and then we will start again, he said.
Before the shutdown, jbf rak produces about 350,000 tons of pets per year.
Maindwal added that the company continues to produce polyester film.
In a statement earlier on Thursday, parent company JBF Industries said it was working with lenders to resolve cash flow issues and that all factories were operating "satisfactorily.
Its shares closed.
Shares of the National Stock Exchange of India rose 9% after hitting 3-
The annual low earlier in the day.
They have fallen more than 20% this week due to concerns about the company's debt.
JBF's board of directors will meet on Friday to discuss the company's revenue and sell or restructure overseas units to cut debt.
India's rating and research firm, which downgraded the company to "d", said last month that the downgrade was due to "significant deterioration in the group's financial risk profile and losses from overseas business ".
JBF said in a statement on Thursday that part of its payments to Indian lenders had been delayed, complaining that recent policy changes in the Indian government had damaged its cash flow.
Bankers in the UAE told Reuters that jbf rak has asked for new working capital to help it restart production of PET resin.
In addition to the 2 billion dirhams debt that is being renegotiated, the company also owes 1 billion dirhams debt to international lenders, they said.
Cheerag B, chief executive of JBF RAK, said.
Arya is a famous Indian businessman who is known for collecting Ferrari cars.
Bank sources saidC.
Arya, chairman of the parent company, is working with the bank to discuss debt issues.
Two people could not be reached for comment.
Bankers and Thomson Reuters data show that banks with exposure to jbf rak include Mashreq, Abu Dhabi Commercial Bank, joint Arab Bank, Ajman Bank and guofujairah bank.
Private equity firm KKR invested $ 20% in 2015, holding a 0. 15 billion stake in JBF Industries.