Indian billionaire Karsanbhai Patel takes 12.4% stake in US miner after selling bankrupt California business

Indian billionaire Karsanbhai Patel, who built the Nirma detergent empire from his backyard, has become a major shareholder in a Nasdaq-listed American miner. The company had just bought his group’s bankrupt California minerals operation.

Patel disclosed a 12.4% stake in 5E Advanced Materials Inc. in a Schedule 13D filing with the US Securities and Exchange Commission dated Oct. 8. He holds the shares through Nirma Ltd. and its US subsidiary, Karnavati Holdings Inc. Based on 5E’s reported share count, the stake is about 6.2 million shares, worth roughly $19 million at Wednesday’s close of $3.11.

5E issued the shares on Oct. 1 when it completed its purchase of the operating assets of Searles Valley Minerals, a 150-year-old industrial minerals producer in Trona, California. Nirma has owned Searles Valley since 2007, when Karnavati bought it from Sun Capital Partners. Part of the shares also went toward repaying financing that Karnavati provided while the business was in bankruptcy.

Karnavati could receive up to 2,155,818 more shares. Of those, 312,500 are tied to the second tranche of a bridge loan, and 1,843,318 are held in escrow pending the resolution of a mechanic’s lien dispute. The filing says Patel’s group holds the stake for investment and may buy or sell shares over time.

Searles Valley filed for Chapter 11 protection in Delaware on June 15 to run a court-supervised sale, after a roughly two-year effort to find a buyer out of court failed. The operation had been profitable before 2019, earning $52 million in operating profit that year, according to the San Bernardino County Sentinel. Earthquakes that struck the area in July 2019 damaged the plants. After that, the business lost about $3 million to $4 million a month and cut about 46% of its workforce.

Nirma’s US unit kept the business running through the bankruptcy with a $20 million junior loan, and it remains a lender to the new owner. Karnavati agreed to provide 5E with a bridge facility of up to $10 million, secured by substantially all of the Searles Valley assets. Of that, $7 million was funded at closing. The loan pays 8% annual interest and comes due in 270 days.

5E paid about $22.9 million in total: $3.4 million in cash, 8.3 million shares and a five-year promissory note of about $6.2 million. Tata Chemicals North America had earlier offered $20 million for the assets. The buyer left the predecessor’s debts and environmental liabilities behind with the bankrupt estate. Those include a $76 million claim from California’s air regulator over greenhouse gas allowances.

The deal moves 5E from a pre-revenue developer to a producer. It takes over three processing plants, a 54-megawatt power plant, the Trona Railroad and about 257 employees. Searles Valley produced more than 1 million short tons of borates, salt, sodium sulfate and soda ash in its last fiscal year. 5E is targeting about $40 million in annual adjusted earnings before interest, taxes, depreciation and amortization once operations stabilize. It also says the brines may contain tungsten, a metal the US considers critical.

“We are moving immediately into execution,” said Paul Weibel, 5E’s chief executive. The company’s shares jumped 20% on the day the deal closed, then gave back some of those gains.

Patel, 82, started Nirma in 1969 by mixing detergent powder at home in Ahmedabad and selling it door to door by bicycle. His cheap washing powder started a price war with Unilever and Procter & Gamble in India. Nirma has since become one of the world’s largest soda ash producers, with interests in cement through the listed Nuvoco Vistas and in pharmaceuticals through Alivus Life Sciences. Nirma bought 75% of Alivus, then called Glenmark Life Sciences, for $680 million in 2024.

Forbes estimates Patel’s net worth at $4 billion.