JK Tyre - V

pending

JK Tyre & Industries Limited (“JK Tyre” or “the Company”) is a leading tyre manufacturer in India. JK Tyre manufactures a wide range of tyres catering to commercial vehicles, passenger vehicles, two/three-wheelers, and tractors. The Company has six plants operated under JK Tyre & Industries Limited, and three operated under its subsidiary Cavendish Industries Limited (CIL). IFC is considering an investment of up to US$100 million in the form of a sustainability-linked senior secured A loan to JK Tyre and CIL. Of the total loan proceeds, up to US$30 million will be to JK Tyre, and up to US$70 million will be to CIL (together referred as “the Borrowers”) and proceeds from the investment will be utilized for brownfield expansion of the Borrowers and to refinance and extend the maturity of existing high-cost debt of CIL (“Project”). The brownfield expansion includes increasing the production capacity of passenger car radial tyres (PCR) at JK Tyres Plant at Banmore, Madhya Pradesh by 3.2 million tyres per year to a total of 15.5 million tyres per year and increasing the production capacity of truck and bus radial tyres (TBR) at CIL’s plant at Laksar in Uttarakhand by 0.28 million tyres per annum to reach a total of 2.25 million tyres per year. The Banmore plant has land available within the existing plant premises to establish a new production line, while the Laksar plant expansion will occur within the existing building infrastructure.  In March 2023, the International Finance Corporation (IFC) made an equity investment in JK Tyre. Please refer to the environmental and social review summary at https://disclosures.ifc.org/project-detail/ESRS/41967/jk-tyre-iii (“JK Tyre- III” or “equity investment”). As part of the equity investment supervision, IFC and JK Tyre have agreed on a revised timeline for the completion of the ESAP #2 (on independent labor audit findings) and ESAP #3 (on natural rubber supply chain management systems) (“revised equity ESAP”) that includes further specific actions to be completed by JK Tyre.