TORONTO – Fairfax India Holdings Corp. (TSX:FIH.U) is leading a plan to invest US$300 million into the Sanmar Chemicals Group, an Indian PVC manufacturer that’s expanding into Egypt.
Fairfax India will provide an initial round of US$250 million, which is the maximum it’s currently allowed to make in any single investment. The investment depends on certain conditions but it’s expected to close by the end of June.
The remaining US$50 million will be funded by Fairfax Financial Holdings Ltd. (TSX:FFH), or another investor, within 90 days of the initial tranche.
Fairfax India says the funding will be through a combination of equity and fixed income securities. It expects to own 30 per cent of Sanmar’s equity as a result of the investment.
PVC, or polyvinyl choride, is widely used to make rigid plastic pipes and other building materials and for flexible plastic consumer products such as water bottles.
The Sanmar investment is the second large deal lined up in recent weeks by Fairfax India. It announced March 28 that the Fairfax group would buy a one-third ownership of the Kempegowda airport near Bengaluru for about C$321 million.