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| Edited By: Promit Mukherjee |Source: DNA |Updated: Mar 17, 2018, 06:58 AM IST
JSW Energy, the power arm of Sajjan Jindal-controlled JSW Group, will have to wait for another fortnight to acquire UK-based power and coal mining company CIC Energy Corp.
Toronto Stock Exchange-listed CIC has extended the deadline for acquisition from February 28 to March 15.
The deal will be completed subject to the company being able to meet certain conditions laid out by JSW Energy in the acquisition agreement signed by the two companies on November 23, 2010, CIC said in a notice to shareholders at February-end.
Though no official response was available from CIC and JSW, it is believed that CIC postponed the date owing to an arbitration notice filed by GCL Botswana Ltd, which is building a power plant with CIC’s subsidiary in Botswana in southern Africa. The arbitration is expected to have a direct bearing on the JSW-CIC deal as under the acquisition agreement, JSW should not be liable to any obligations or liabilities arising out of CIC’s previous unsettled affairs and hence, by the time the acquisition date arrives, all such issues have to be settled by CIC.
In August 2010, CIC International (a subsidiary of CIC Energy) and GCL Botswana (a subsidiary of Hong Kong-based Chinese company Golden Concord) signed a shareholders’ agreement to jointly build a 300 megawatt power plant in Botswana to be called the Mookane Domestic Power Project.
It was decided that a holding company would be formed which would develop the power plant where CIC will hold a 30% interest and GIC will hold the rest. Besides, the company would also develop a coal mine which would produce 1.3 million tonnes of coal per annum by 2013, when the power plant would be commissioned. The cost of the power plant is close to yuan 5.5 billion, or close to $850 million.
GCL Botswana has alleged in its arbitration that “CIC International has a contractual obligation under the shareholders’ agreement to agree with GCL Botswana the terms of a power purchase agreement and a coal supply agreement.”
