Jain Irrigation System Ltd., on Tuesday, said that its global irrigation business would be merged with Temasek-owned Rivulis in a cash-and-stock deal. The company took this move to reduce its debt by 45%, or Rs 2,500 cr.
Jain Irrigation’s global business has been valued at Rs 4,200 cr. of which Rs. 2,7oo will be used for overseas debt and Rs 200 cr. will be credited to the parent company, Anil Jain, Managing Director, told reporters.
In the merged entity, Jain Irrigation will have 22%, and Rivulis will hold 78% shares of the total.
The deal is likely to be concluded in the next six months, and the combined entity will have a revenue of USD 70 million.
Currently, Rivulis has an annual revenue of USD 400 million, whereas Jain Irrigation’s annual revenue is USD 350 million.
The International Irrigation Business (IIB), after merging with Rivulis, will become the second-largest climate leader in the world with a revenue of around USB 750 million.
In a regulatory filing, Jain Irrigation Ltd. said, “Cash proceeds will be utilised for the reduction of consolidated debt of Jain Irrigation by around 45%, which includes all the restructured overseas bonds to the tune of USD 225 million and complete debt of overseas operating companies of IIB”.
With this deal, Jain Irrigation will further focus on improving India’s business to drive higher growth and margins in one of the fastest growing irrigation markets in the world. The company aims to reduce the debt on the standalone Indian business balance sheet.
Jain Irrigation has 29 manufacturing plants all over the globe. The company has been engaged in manufacturing Micro Irrigation Systems, PVC Pipes, HDPE Pipes, Plastic Sheets, Renewable Energy Solutions, Agro Processed Products, Plastic Sheets, Tissue Culture Plants and other agricultural inputs for more than 34 years.