Ballarpur Industries’ $500-million deal to sell 98.08 per cent stake in Malaysia’s Sabah Forest Industries (SFI) to Pandawa Saktihas has fallen through with the buyer not meeting conditions after repeated extensions of closure deadline.

The latest extension of the Long Stop Date (LSD) for the deal was announced on May 25 to June 30, 2016 for completion of the deal on the request of the Malaysia-based buyer.

In a regulatory filing, BILT said: “Since the transaction has not been consummated within the above long stop date, BPH has terminated the SSA and is invoking the performance guarantees of $50 million furnished by the buyer,” the company informed BSE.

SFI is controlled by Ballarpur Paper Holdings BV (BPH), a step-down subsidiary of Ballarpur Industries.

According to the share sale agreement (SSA), Pandawa Saktihas had to pay $50 million as an advance by June 3, 2016, and pay the balance equity consideration to acquire 50 per cent equity of SFI by June 30, 2016.

The calling off of the deal comes after several extensions of the deadline. On February 8, 2016 BILT had said it had been extended to February 29 and then to March 31. Then on April 4, the company said it has extended it to May 16, 2016 on the buyer’s request.

On May 25, the company informed that it has again extended LSD to June 30, 2016 to acquire 50 per cent equity of SFI by the Malaysian firm.

Last September, Ballarpur Industries had announced that its subsidiary Ballarpur Paper Holdings BV would sell its entire 98.08 per cent stake in its Malaysian arm Sabah Forest Industries for $500 million (about Rs 3,307 crore).

Related Topics
comment COMMENT NOW