Fairfax ups stake in Sanmar

Chennai: Canadian billionaire Prem Watsa’s Fairfax Holdings Corporation has increased its stake in privately held Sanmar Chemicals to 43% from the present 30% after it decided to reinvest part of its gains it earned from Sanmar.

“Fairfax India will invest approximately half the consideration into common shares of Sanmar, increasing Fairfax India’s equity interest in Sanmar to approximately 43%. The transaction is subject to customary closing condition and is expected to be completed in the first half of 2019,’’ Fairfax said in a statement.

The Canadian investor pumped in $ 300 million in Sanmar Chemicals in 2016 in the form of bonds and shares representing a 30% equity interest.

“Now Fairfax has entered into an agreement with Sanmar pursuant to which Sanmar will settle the $300 million and an effective annual interest rate of 13%, which at March 31, 2019 would be approximately $388 million (at current exchange rates),” said the Fairfax’s statement.

The investment gain from the common shares of Sanmar is primarily supported by the continuing strong demand for PVC and related products in India, Europe, the Middle East and North Africa that Sanmar will benefit from through the completion of new capital projects in India (Chemplast Sanmar), and the successful recent coming online of its increased capacities in Egypt (TCI Sanmar), the statement said.


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