Kiri Industries Limited has formally objected to an alternative transaction structure proposed by court-appointed receivers for the sale of its 37.57% stake in DyStar Global Holdings (Singapore) Pte. Ltd. The company has refused to consent to the new arrangement and has submitted its objections to the Singapore International Commercial Court (SICC).

Alternative Transaction Structure Details

The receivers have proposed a restructured deal involving both a share buyback and partial sale:

Company's Key Objections

Kiri Industries has raised several concerns with the SICC regarding the proposed structure:

Financial and Operational Concerns

• Cash Repatriation: Objects to partial repatriation of DyStar's cash from China, insisting all non-operational cash reserves be repatriated to Singapore
• Exit Certainty: Lacks certainty regarding complete exit from DyStar operations
• Automatic Termination: Demands the amended SPA should automatically terminate if not fully performed by January 31, 2026

Legal and Procedural Issues

• Receiver Powers: Questions whether share buyback falls outside receivers' powers under the appointment order
• Rights Protection: Concerns that participation may compromise existing court-ordered rights
• Extension Opposition: Objects to further extensions, advocating for alternative bidders

Court Extension Request

The receivers have applied to the SICC for extending the long-stop date from December 31, 2025, to March 31, 2026. This extension aims to provide runway for:

Transaction Timeline and Deposits

The deal has faced multiple delays since its initial announcement:

Zhejiang Longsheng Group has deposited an additional USD 5.00 million, bringing the total escrow amount to USD 13.59 million. This deposit may be forfeited at the receivers' discretion if transactions are not completed by the extended deadline.

Next Steps

Kiri Industries continues to take legal advice from its counsels and will pursue all necessary steps to protect its legal and commercial interests. The company has not consented to any extensions granted by the receivers and maintains its position against the alternative transaction structure. The SICC's decision on the receivers' extension application and the company's objections will determine the future course of this prolonged transaction.

Kiri Industries Limited (KIL), a leading manufacturer of dyes and chemicals, has released an investor presentation ahead of its upcoming meeting with investors and analysts scheduled for September 18. The presentation offers insights into the company's operations, financial performance, and strategic expansion plans.

Financial Highlights

KIL reported operational revenue of INR 7,400.00 million for the fiscal year. However, the company faced challenges, recording a negative EBITDA of INR 540.00 million and a negative Profit After Tax (PAT) of INR 1,084.00 million for the same period.

Core Business Overview

Kiri Industries continues to maintain its position as a significant player in the dyes and chemicals sector. The company specializes in manufacturing and exporting dyes, dye intermediates, and basic chemicals from India. Its production facilities are strategically located in Gujarat, leveraging the state's robust chemical industry infrastructure.

Market Capitalization

As of June 30, Kiri Industries boasted a market capitalization of approximately INR 39,958.84 million, reflecting investor confidence in the company's long-term prospects despite current financial headwinds.

Strategic Diversification

In a significant move to diversify its portfolio, Kiri Industries has announced its entry into the copper smelting and fertilizer sectors. This expansion is being executed through its subsidiary, Indo Asia Copper Ltd.

Copper Smelting and Fertilizer Project Highlights

1. Investment Scale: The estimated project cost stands at INR 10,661.00 crores, marking a substantial commitment to this new venture.

2. Equity Infusion: KIL has already infused INR 1,036.00 crores as equity into the project.

3. Funding Structure: The remaining investment follows a 70:30 debt-equity ratio, demonstrating a balanced approach to project financing.

4. Project Timeline: Construction work has commenced with a targeted completion timeline of 36 months, starting from October 1.

5. Strategic Partnerships: The company is in the process of securing long-term contractual arrangements with global miners and trading partners to ensure a stable supply chain.

Future Outlook

The diversification into copper smelting and fertilizer production represents a significant pivot for Kiri Industries. This move aligns with India's push for self-reliance in critical sectors and positions the company to capitalize on the growing demand for copper in renewable energy, electric vehicles, and infrastructure development.

While the current financial results show stress on profitability, the strategic expansion could potentially open new revenue streams and improve the company's financial health in the medium to long term.

Investors and analysts will likely seek more details on the execution plan for the new project and strategies to turnaround the core dyes and chemicals business during the upcoming meeting on September 18.

As Kiri Industries navigates through this transformative phase, stakeholders will be watching closely to see how effectively the company manages its expansion while addressing the challenges in its traditional business segments.