Jain Irrigation to merge business with Rivulis

Jain Irrigation announced the merger of its wholly-owned subsidiary Jain International Trading BV with Temasek-owned Rivulis Pte, Singapore, on Tuesday in an effort to reduce the amount of debt on its balance sheet. The project will become the second-largest irrigation and climate leader in the world, with annual earnings of over 750 million dollars. 
 
According to Jain Irrigation, the company’s consolidated debt, which comprises all restructured foreign bonds totaling $225 million and the full debt of overseas operating businesses that encompass international irrigation business, will be reduced by about 45% as a result of the cash profits. 
 
The international irrigation business of Jain Irrigation is valued at close to Rs 4,200 crore, according to Anil Jain, managing director of Jain Irrigation. The merger will result in a about Rs 2,700 crore reduction in the foreign debt. A 10-year supply contract is also being signed between us and the business. This would guarantee that independent businesses in India will continue to export. 
 
Temasek will own the remaining 78 percent, leaving Jain International Business with a stake of about 22% in the combined company. Jain Irrigation would also be able to disburse the Rs 2,275 crore corporate guarantee it provided to bondholders and lenders for the international irrigation business.

Jain Irrigation

Jain Irrigation and the combined company will have a long-term supply relationship, which will increase sales and profits. According to a press statement from Jain Irrigation, the combined company will keep using and promoting well-known JAIN Brands in markets where they are well-known and valuable. 
 
Prior to the Tuesday development, shares of Jain Irrigation concluded the day 20% higher at Rs 37.50. The benchmark equity index BSE Sensex, on the other hand, closed 1.81 percent higher at 52,532.07. 
 
“Jain Irrigation will focus on further enhancing the India business going forward to achieve stronger growth and margin in one of the world’s fastest developing irrigation markets, and eventually strive to reduce debt on the independent Indian business balance sheet as well,” the firm stated in a release.

The company’s words

Jain continued by saying that because of its geographic reach, the range of its product offerings, and its technological depth and expertise in micro-irrigation, the merger with Rivulis will create a world-leading business that is perfectly positioned to service its global customer base. 
 
In addition to implementing the crucial knowledge transfer for water efficiency and grower productivity, he stated, “this will enable us all to confront climate change and food security concerns with sustainable solutions.” 
 
The transaction is anticipated to close by the beginning of 2023, subject to all necessary regulatory approvals and other normal closing conditions. For the deal, JITBV received advice from Goldman Sachs as its financial advisor, Baker McKenzie as its legal advisor, and PWC as its tax and diligence advisor.