rivulis: Jain Irrigation to merge Rs 4,200-cr worth global irrigation biz with Temasek-owned Rivulis

said Tuesday that its global irrigation business will be merged with Temasek-owned Rivulis in a cash-and-stock deal, a move that will help the company reduce its consolidated debt by Rs 2,700 crore or about 45 percent.

Jain Irrigation’s global irrigation business is valued at Rs 4,200 crore, of which Rs 2,700 crore will be used to repay all foreign debts and Rs 200 crore will come to the parent company, the director Anil Jain told reporters here.

In the merged entity, it will have a 22 percent equity stake, while Rivulis will have 78 percent.

The deal is likely to close in the next six months, he said, adding that the combined entity will have $750 million in revenue.

Currently, Rivulis has annual sales of $400 million, while Jain Irrigation’s global irrigation business is $350 million.

Back to recommendation stories

Ltd’s wholly owned subsidiary Jain International Trading and Rivulis have entered into definitive transaction agreements.

Jain Irrigation’s International Irrigation Business (IIB) will now merge with Rivulis to create a global leader in irrigation and climate, the second largest in the world with sales of approximately USD 750 million.

In a regulatory filing, Jain Irrigation said that “cash proceeds will be used to reduce Jain Irrigation’s consolidated debt by approximately 45 percent, including all USD 225 million restructured overseas bonds and the entire debt of overseas operating companies consisting of IIB.”

Systems Limited, a leading micro-irrigation system company, had a consolidated net debt of about Rs 6,000 crore at the end of March 2022 and of that Rs 3,300 crore related to the Indian company.

Jain Irrigation will also release its corporate guarantee of Rs 2,275 crore to bondholders and IIB lenders. It will have a long-term supply agreement with the merged entity, which would boost revenues and profits, it added.

“The merged entity will continue to use and promote prominent JAIN brands in markets where they have significant presence and value,” it said.

In terms of governance, Jain will have representative directors and observers on the company’s board of directors and will be able to aid its growth through its significant expertise in micro-irrigation.

The merged entity will have dual headquarters in Singapore and Israel and will be Rivulis Pte Ltd. continue to be called.

For corporate branding purposes, the company will be presented as ‘Rivulis (In alliance with Jain International)’. Richard Klapholz, current CEO of Rivulis, will continue to lead the company.

Going forward, Jain Irrigation will focus on further enhancing its Indian business to achieve higher growth and margins in one of the fastest growing irrigation markets in the world. It will aim to reduce debt on India’s stand-alone corporate balance sheet and debt agreed with lenders in the recent restructuring implemented in March this year.

Jain said the company has entered into this alliance with Temasek to create sustainable and impactful hi-tech agribusinesses.

“We expect the merger with Rivulis to create a global player ideally placed to serve its global customer base thanks to its geographic footprint, broad offering and technological depth and expertise in micro-irrigation,” he added.

This will enable all of us to address the challenges of climate change and food security with sustainable solutions and implement the crucial knowledge transfer for water efficiency and productivity for growers, he noted.

Jain Irrigation Systems has factories in 29 locations around the world. It has been engaged in manufacturing micro irrigation systems, PVC pipes, HDPE pipes, plastic sheets, agro-processed products, renewable energy solutions, tissue culture plants and other agricultural inputs for over 34 years.

The consolidated revenue was Rs 7,119.5 crore while the net profit in the last fiscal year was Rs 358 crore.

Leave a Comment

Your email address will not be published.