New Delhi: Ballarpur Industries' $500 million deal to sell 98.08 percent 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 Long Stop Date (LSD) for the deal was announced on 25 May to 30 June, 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. As per share sale agreement (SSA), Pandawa Saktihas had to pay $50 million as an advance by 3 June, 2016 and pay the balance equity consideration to acquire 50 percent equity of SFI by 30 June, 2016.
The calling off of the deal comes after several extensions of the deadline. On 8 February, 2016 BILT had said it had been extended to 29 February and then to 31 March. Then on 4 April, the company said that it has extended it to 16 May, 2016 on
On 25 May, the company informed that it has again extended LSD to 30 June, 2016 to acquire 50 percent equity of SFI by the Malaysian firm. Last September, Ballarpur Industries had announced that its subsidiary Ballarpur Paper Holdings BV would sell entire 98.08 percent stake in its Malaysian arm Sabah Forest Industries for $500 million (about Rs 3,307 crore).