In a setback for the Gautam Thapar-owned Ballarpur Industries, the company’s plan to sell its Malaysian arm, Sabah Forest Industries (SFI), to Pandawa Sakti (Sabah) for US$ 500 million (Rs 3,368 crore) has fallen through as the buyer couldn’t arrange cash. BILT had announced the transaction in September last year to halve its Rs 6,300-crore debt.
Despite three extensions, Pandawa Sakti couldn’t close the deal, leading to termination of the transaction. According to bankers, the options before BILT would be to either hunt for a new buyer or run the company for some more time. As the buyer failed to close the deal, Ballarpur invoked performance guarantees of US$ 50 million. In 2007, BILT had acquired Malaysia’s largest paper company for US$ 261 million.
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 US$ 50 million furnished by the buyer,” the company informed BSE.
On July 5, Ballarpur announced that its rival JK Paper made a nonbinding offer to acquire two units of BILT Graphic Paper Products at Ballarpur and Asthi in Maharashtra. The valuation process of the two units is still on.
Ballarpur is not the only Indian company having a tough time in finding a buyer for its foreign assets. Tata Steel is under pressure to sell its UK operations where, according to reports, it is losing £1 million a day. Similarly, Lanco, GVK and Adani Group are stuck with coal mines in Australia and are unable to develop these because of falling coal prices. Recently, after a long time, Tata Communications managed to sell its stake in Neotel, South Africa to a local company.
