Kolkata: The Chatterjee Group (TCG) led by New York-based serial investor Purnendu Chatterjee on Wednesday signed an agreement to acquire a 90% stake in Mitsubishi Chemical Corp.’s Indian subsidiary, MCC PTA India Corp. Pvt. Ltd, for an estimated $48 million, or 323 crore at the current exchange rate.

The deal rescues MCC PTA, a producer of purified terephthalic acid, or PTA (a precursor to polyester), from potential closure and secures the jobs of some 1,100 workers, said a person close to Chatterjee, asking not to be identified.

Mitsubishi Chemical said on Wednesday that it was scaling back its investments in commodity chemicals such as PTA to focus on other businesses.

At a board meeting in Tokyo on Wednesday, Mitsubishi Chemical decided to divest itself of its PTA unit in China as well.

Built at a cost of 1,475 crore and commissioned in 1999, the company’s factory in Haldia in East Midnapore district is one of the biggest Japanese investments in India.

In 2009-10, its capacity was expanded with a substantial investment of close to 2,000 crore.

Though it is in some difficulty now, it is inherently a good company, Chatterjee said in a phone interview, adding, “I am delighted to able to collaborate with a technological giant such as Mitsubishi Chemical Corp."

Because product lines are different, the deal may not have any immediate implication for TCG’s other major investment in West Bengal: Haldia Petrochemicals Ltd (HPL), in which Chatterjee recently acquired a controlling stake from the state government, ending years of bickering over control.

However, going forward, the deal is expected to make technology available to HPL to expand, Chatterjee said.

TCG, according to Mitsubishi Chemical’s statement, has operating assets worth $900 million across the world.

For several years on the trot, MCC PTA has been making losses as revenue declined in the wake of Chinese dumping: in the year till March 2016, its net loss deepened to 2,911 crore on revenue of 4,740 crore. Its net worth has been completely eroded.

Substantial capacity was created in China beginning in 2009-2010, which led to a global glut in the PTA market. That, in turn, impaired MCC PTA’s pricing power. The company started to tumble down a slippery slope as cheap Chinese imports incrementally dented profitability since 2012, according to Chatterjee’s associate cited above.

Mitsubishi Chemical Corp. said in a statement that the shares to be sold to TCG are valued at $48 million, but TCG did not mention the price in its media release. The cost of acquisition could go up, depending on the performance of MCC PTA, said Chatterjee’s associate.

Asked if HPL’s assets are to be leveraged for the transaction, he said, “Not immediately." He refused to elaborate. The deal envisages infusion of funds to pay off MCC PTA’s debts, according to TCG’s statement.