Mumbai: Lanco Infratech said on Tuesday its unit Griffin Coal has terminated a coal supply pact with Australia’s Perdaman Chemicals and Fertilisers as the latter failed to meet a condition to achieve financial closure.
Griffin Coal, which was acquired by Lanco in March for $760 million, were to supply 2.8 million tonnes per annum of coal for 25 years beginning in 2014 to Perdaman’s proposed fertiliser project located at Collie, Western Australia.
“Griffin Coal has in good faith offered to withdraw this formal termination and to provide Perdaman with additional time until 15 October, 2011 to achieve financial close,” Lanco said in a statement, adding, Perdaman has time until 6 September to accept the offer.
Perdaman offered no immediate comment to Reuters on Tuesday.
Lanco and Perdaman are engaged in a legal battle primarily over the coal supply agreement.
In June, Perdaman had filed a lawsuit in the Supreme Court of Australia seeking compensation of A$3.5 billion for breach of coal supply agreement, while Lanco had termed Perdaman’s claims as baseless.
Separately, on 12 August, Lanco had said the Supreme Court of Western Australia dismissed an application by Perdaman that sought a freezing order refraining Griffin from securitising its assets for its lenders without notice to Perdaman.
“End of last week, they (Perdaman) appealed on the order. It came up for hearing today. It’s now listed for about three weeks from now. We have given them an undertaking to maintain status quo,” Lanco’s chief executive officer for business development Nagaprasad Kandimalla told this News Agency on Tuesday.
Shares in Lanco, valued by the market at $840 million, rose as much as 9.3% on Tuesday, but gave up some ground to close 6% higher in the Bombay Stock Exchange that gained 1.6%.