Sources said IFC has communicated its desire to pick up equity. IFC, which is eyeing equity worth $10 million, has completed due diligence.
MUMBAI: International Finance Corporation (IFC), the private equity venture of the World Bank and one of the largest European development finance institutions, will invest $40 million (Rs 180-crore) in West Coast Paper Mills Ltd.
Sources said IFC has communicated its desire to pick up equity. IFC, which is eyeing equity worth $10 million, has completed due diligence. A formal announcement is expected come soon.
The Rs 550 crore West Coast Paper Mills, an S K Bangur Group firm, will get the investment from IFC by April. “We are getting investment of $40 million in the form of debt for our Rs 1,000-crore expansion plans, but there would be no equity sale to IFC,” K L Chandak, executive director, West Coast told DNA Money.
Analysts said private equity investment in domestic paper companies is rising steadily and could grow further as the sector prepares to spend Rs 13,000 crore in the next three years to expand capacity. IFC has invested $40 million in LN Bangur-owned Andhra Pradesh Paper Mills Ltd (APPML) in debt and equity.
West Coast has plans to ramp up capacity from 1,80,000 tonnes to 3,00,000 tonnes per annum in the next three years. The company has recently placed orders to global firm Metso for pulp line.
Besides paper, which accounts for 92% of West Coast total revenues, it’s also involved in manufacture and sale of optical fibre cable and jelly filled telephone cables.
The company is strengthening its foothold in the international markets like Egypt, Iran, Jordan, Muscat, UAE, Singapore, Hong Kong, Malaysia, Mauritius, Myanmar and Tanzania.
Local paper companies, including Ballarpur Industries (Bilt), Tamil Nadu Newsprint, JK Paper and West Coast, will be adding over 20 lakh tonnes in capacity to the current total capacity of over 60 lakh tonnes in next three-year period.
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