The World Bank-private equity arm International Finance Corporation (IFC) will invest $40 mn (Rs. 180 crores) in West Coast Paper Mills Limited. It has completed the due diligence of West Coast and a formal announcement is expected to come soon.
The Rs. 550 crore-West Coast Paper Mills will get the investment from IFC by April. The investment will be made in the form of debt for the company’s Rs. 1000 crore-expansion plans, but there would be no equity sale to IFC.
Private equity investment in domestic paper companies is rising steadily and could grow further as the sector prepares to spend Rs. 13,000 crores in the next three years to expand capacity. IFC earlier had invested $40 mn in Andhra Pradesh Paper Mills Limited in debt and equity.
West Coast has plans to ramp up capacity from 180,000 tonnes to 300,000 tonnes per annum in the next three years. The company has recently placed orders to global firm Metso for pulp line.
Local paper companies, including Ballarpur Industries (Bilt), Tamil Nadu Newsprint, JK Paper and West Coast, will be adding over 2 mn tonnes in capacity to the current total capacity of over 6 mn tonnes in next three-year period.
Read the article in DNA Money.
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