JBF to buy back Citigroup’s 11% in Singapore arm

MUMBAI: Polyester chips maker JBF Industries is set to buy back the remaining 11% stake of Citigroup Venture Capital (CVC) in its Singapore subsidiary for roughly $40 million (approximately Rs 176 crore), two people with knowledge of the development said. The Mumbai-based company bought back Citigroup Venture’s 22% in this arm, which owns the Ras Al Khaimah unit in the United Arab Emirates, in May.

Following the stake buy-back, JBF may list the Ras Al Khaimah unit, which accounted for over 50% of the company’s profits in 2009-10, in Singapore, the two people said.

“Nothing has been finalised yet. We will first buy back the entire 33% stake held by Citi Venture,” JBF’s managing director Rakesh Gothi told ET.

Citigroup Venture invested about $75 million to buy 33% in JBF’s Singapore arm in 2007. The company, which bought back the 22% for about $60 million, is paying Citigroup a higher sum for the remaining 11% stake because of the recent improved performance of its Ras Al Khaimah unit, which makes PET (polyethylene terephthalate) chips (used to make bottles for water and beverages) and PET films (used for food and medicine packaging), said one of the people quoted above. A Citigroup spokesperson declined comment. An email questionnaire went unanswered.