Mandala Capital portfolio company Jain Irrigation completes transaction to merge its international irrigation business with Rivulis

All the regulatory approvals related to the merger of multiple overseas subsidiaries of JITBV have been received by both entities. The condition precedent required by Share Purchase Agreement entered into by Rivulis Pte. Ltd & Jain International Trading B.V, have been satisfied. Jain (Israel) B.V. (step down subsidiary of JITBV) shall hold a strategic minority stake of ~18.7% in Rivulis Pte. Ltd post merger.

By virtue of this cash and stock transaction, the following is achieved.

  • Reduction in consolidated net debt of Jain Irrigation by 44% i.e. ~INR 2,800 crore (INR 28.0 billion). December 31, 2022 debt was INR 6,415 crore post transaction debt will be down to INR 3,615 crore.
  • Release of corporate guarantee given by Jain Irrigation, India of US$ 300 million (eq. INR 24.6 billion) to bondholders and lenders of IIB.
  • Jain (Israel) B.V. will continue to hold meaningful stake of ~18.7% in MergeCo
  • Jain Irrigation shall have a long-term supply agreement with the MergeCo, which will drive revenues and profits.
  • The MergeCo will continue to use and promote prominent JAIN Brands in markets where they have significant presence and value.
  • In terms of governance, Jain shall have representative directors and observer on the board of the MergeCo and will be able to help its growth through its significant expertise in micro-irrigation.
  • Jain Irrigation retains potential future value generation from the creation of this large global irrigation leader.

Going forward, Jain Irrigation will focus on further improving India business to drive higher growth and margin in one of the fastest growing irrigation markets in the world, and eventually aim to reduce debt on the standalone Indian business balance sheet as well.