UPDATE 2-Fairfax India to invest $300 mln in Sanmar Chemicals

(New throughout, adds comments from Fairfax Chairman,
background on company)
By Devidutta Tripathy and Euan Rocha
MUMBAI/TORONTO April 8 (Reuters) - Fairfax India Holdings
FIHu.TO said on Friday it has agreed to acquire a minority
stake in privately held Indian petrochemical company Sanmar
Chemicals via a roughly $300 million investment.
The Sanmar investment is the latest in a string of bets
Fairfax India and its sister concern Fairfax Financial Holdings
Ltd FFH.TO have made in the country within the last year. The
two entities are chaired by Canadian billionaire Prem Watsa.
Indian-born Watsa, whose main investment vehicle is Fairfax
Financial Holdings, set up Fairfax India in 2014 to hone in on
investments in that country, where he expects strong long-term
growth driven by Prime Minister Narendra Modi's economic reform
agenda.
"The economy in Canada is about $2 trillion with only 35
million people, while India by comparison with 1.2 billion
people plus has an economy the same size. It's an unbelievable
opportunity," said Watsa, in an interview.
The investment in Sanmar that will give Fairfax a 30 percent
equity stake in the company, is being made via a combination of
equity and fixed income instruments, as Reuters had initially
reported earlier on Friday.
Sanmar, a family-owned firm chaired by N. Sankar, is one of
India's largest producers of polyvinyl chloride (PVC). The firm,
which owns manufacturing facilities in India and Egypt, is also
a manufacturer of other specialty chemicals.
Sanmar is also in the process of expanding its PVC capacity
in Egypt from 200,000 tons a year to 400,000 tons a year. Once
completed, Sanmar will have a total PVC capacity exceeding
700,000 tons a year, making it one of the largest PVC makers
globally.
This investment, Watsa's latest bet in India, comes barely
weeks after Fairfax agreed to buy a 33 percent equity interest
in the Bangalore International Airport from GVK Power and
Infrastructure Ltd GVKP.NS for $321 million.
"We just bought a 33 percent stake in the Bangalore airport,
and we hope to add more over time, as that airport is going to
expand," said Watsa. "The Indian economy is going to expand, it
just stands to reason that as the economy expands there'll need
to be more infrastructure investments."
Back in February, Fairfax bought a 45 percent stake in ADI
Finechem ADIF.NS , a small Ahmedabad-based specialty chemical
company, for $19 million. Last August, it acquired a majority
stake in India's largest nongovernment grain-handling company,
National Collateral Management Services Ltd, for $126 million.