Fairfax India Holdings Corporation, an investment holding company has increased its stake in the Chennai-based Sanmar Group. Sanmar bought bonds held by Fairfax India at a worth of INR 30.20 Billion, inclusive of the bond value and an effective annual interest rate of 13 per cent. Fairfax, then, went for equity infusion in the group by re-investing approximately INR 14.20 Billion from the cash-consideration that it had received from former deal with the group.
This investment has led to an increase in Fairfax share to about 43 per cent in the group company. Owing to the Group’s satisfactory performance in the Chemical business under the flagship company of Chemplast Sanmar (Chemplast) but poor performace in Egypt-based TCI Sanmar (TCI), overall financial performance of the company was not very attractive. However, expansion plans of Chemplast including increasing suspension grade PVC capacity to 600 KTPA by 2023 and to 900 KTPA by 2025 in Cuddalore is anticipated to increase its profitability over the years.
