PwC advises on $1 billion debt restructuring of JBF Group

One of the UAE’s most complex restructuring projects has come to a successful close, with PwC acting as the lead Financial Advisor to an American private equity giant and other financial creditors during the debt restructuring of JBF Group.

JBF Group is a business that manufactures and supplies high-quality polyester resins and films used in the packaging industry. The company manufactures its products in three locations: the United Arab Emirates, Bahrain, and Belgium.

As part of a major restructuring process, valued at over $1 billion, US-headquartered Davidson Kempner Capital Management (an investor with more than $37 billion in assets under management) has acquired a significant majority equity stake in JBF Belgium and JBF Bahrain, with local and international investors holding the remainder.

That restructuring was advised on by PwC, which provided expertise in financial restructuring and deal support. “The successful conclusion of this deal is a testament to our Restructuring team’s ability to support and deliver optimal restructuring and turnaround solutions to our clients,” said Mo Farzadi, who leads PwC’s Restructuring business in the Middle East.

On top of its sheer size, Farzadi also highlighted the strategic importance of this debt restructuring for the UAE market. “As one of the major onshore in-court restructuring cases, JBF Group's restructuring is a significant milestone in the successful use of the UAE bankruptcy law to execute a complex debt-for-equity transaction.”

Indeed, the transaction is believed to be the first significant debt-for-equity transaction of this kind executed under the UAE’s onshore bankruptcy law, likely setting a precedent for future restructurings.

Davidson Kempner Capital Management said that under its ownership, the Bahrain and Belgium operations will be able to “prosper with the support of well-capitalized institutions who are committed to the long-term success of the business.”

The UAE business goes standalone

Meanwhile, the UAE business has been carved out from JBF Group and sold in a separate deal to the Investment and Development Office (IDO), the investment arm of the Government of Ras Al Khaimah (where JBF UAE is based).

“IDO’s support to JBF UAE is on the basis of its importance to the industrial ecosystem in Ras Al Khaimah as well as its future potential given its standing in the film and polyester industry”, said Mohammed Sultan Al Qadi, Managing Director of IDO.

JBF UAE will operate as a standalone entity, and maintain its own governance, management, and independent operations, the IDO confirmed. Financial terms of this restructuring deal have not been disclosed.

Rohit Vashistha, the CEO of JBF UAE, stated: “I am confident that this decisive engagement by the IDO will propel JBF UAE to new heights and future success. The industry has significant long-term growth potential, and I look forward to harnessing the skills and brand underlying this organization and to help drive it forward.”