Mumbai: Canadian billionaire Prem Watsa’s Fairfax India Holdings Corp. on Friday announced that it will invest $300 million (approximately 2,000 crore today) into Sanmar Chemicals Group.

The investment will be through a combination of equity and fixed income securities, Fairfax said in a statement. Fairfax India is the India-dedicated investment vehicle for the Fairfax group with a corpus of around $1 billion.

“As a result of this investment, Fairfax India will acquire a 30% equity ownership in Sanmar and also generate a fixed return on its investment," the statement said.

Sanmar is a speciality polyvinyl chloride (PVC) company and one of the major suspension PVC manufacturers in India with an installed capacity of almost 300,000 tonnes per annum. PVC is a widely used synthetic plastic polymer.

The company is in the process of expanding its PVC capacity in Egypt from 200,000 tonnes per annum to 400,000 tonnes per annum, the release said.

“Once the expansion is completed, Sanmar will have a total PVC capacity of over 700,000 tonnes per annum, making it among the largest PVC companies in the world. In addition, Sanmar also manufactures caustic soda, chloromethanes, refrigerant gases, industrial salt and speciality chemical intermediates," Fairfax said.

About $250 million will be invested by Fairfax India, the first tranche of the transaction. Upon closing of the first tranche, Fairfax Financial Holdings Ltd, another entity of the Fairfax group, will invest $50 million more in the second tranche.

“The first tranche is expected to be completed in Q2 of 2016 upon the satisfaction of certain conditions precedent, including the establishment of a term loan facility for $280 million between TCI Sanmar Chemicals Egypt, the Egyptian subsidiary of Sanmar, and its lenders," Fairfax said.

Sanmar will benefit by having a financially strong shareholder with a global footprint, said N. Sankar, chairman of Sanmar Group. “We look forward to the expansion of our capacities in Egypt and India creating value for all stakeholders," he added.

Last month, Fairfax group announced that Fairfax India and Fairfax Financial would together acquire a 33% stake in debt-laden infrastructure developer GVK Power and Infrastructure Ltd’s Bangalore International Airport Ltd for 2,149 crore.

With the Sanmar investment, the group’s total investment in India in the last 12 months has crossed $1 billion.

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