Ballarpur Industries Private Equity Investments in step down subsidiary, Ballarpur Paper Holdings B.V.

Ballarpur Industries Ltd (BILT) on January 21, 2008 has announced approval of equity investments of USD 175 million by two major Private Equity Investment firms, GIC Special Investments Pte Ltd (a wholly owned subsidiary of Government of Singapore Investment Corporation Pte Ltd) and JP Morgan's Principal Investment Management Group in Ballarpur Paper Holdings B.V. (BPH) which will entitle them to an approx 21% equity stake. BPH is a wholly owned step down subsidiary of BILT in Netherlands.

BILT had created BPH as a special purpose vehicle for the acquisition of Sabah Forest Industries Sdn Bhd (SFI) the largest integrated pulp and paper mill in Malaysia. BPH owns 97.8% of the capital in SFI and the balance 2.2% is held by the Government of Sabah.

Pursuant to the financial restructuring in terms of the approved Scheme of Arrangement and Reorganisation, the three undertakings of BILT at Bhigwan, Ballarpur and Kamalapuram were transferred to its wholly owned subsidiary in India, BILT Graphic Paper Products Ltd (BGPPL) through a slump exchange effective July 01, 2007 for a lump sum value of Rs 1,950 crore. BILT shall transfer its investments in BGPPL to BPH.

BPH shall utilize the funds to be received from the Private Equity Investment firms to part finance consideration payable to BILT for sale of its investments in BGPPL.