Mumbai: Port-based logistics company Gateway Distriparks Ltd on Tuesday informed the stock exchanges that private equity firm Blackstone Group LLC has sent it an arbitration notice following the company’s failure to buy back Blackstone’s stake in a subsidiary company. Gateway Distriparks is acquiring the entire equity and equity-linked instruments held by Blackstone in Gateway Rail Freight Ltd, which handles the rail operations of the parent.
“Due to un-contemplated events arising in the debt market, Gateway Distriparks could not raise the required funds before the due date of 28 December 2018, to make the balance payment of ₹ 560 crore, plus compensation @15% per annum, from 28 September 2018, to 28 December 2018. Discussions are on to complete the transaction," Gateway Distriparks said in its exchange filing.
In addition, Blackstone Mauritius has sent an arbitration notice under the share subscription and shareholders agreement entered between Gateway Distriparks, Gateway Rail and Blackstone, the filing said.
Blackstone acquired a stake in the company in 2009 for ₹ 300 crore. Currently, Gateway Distriparks holds 59.11% in the rail subsidiary.
After acquiring Blackstone’s stakes, its stake will go up to 99.80%.
Gateway earlier informed the stock exchanges that it was buying Blackstone’s entire stake for a cash consideration of ₹ 810 crore, of which ₹ 560 crore is the balance amount to be paid to the PE firm.
On 24 December, the Gateway Distriparks board approved raising up to ₹ 620 crore through debt securities, including non-convertible debentures, to pay the balance to Blackstone.
Gateway Rail reported a revenue of ₹ 802.7 crore in 2017-18, against ₹ 760.9 crore in the previous fiscal.
On Tuesday, Gateway Distriparks shares closed at ₹ 126.40, down 2.43% on the BSE, while the benchmark Sensex closed at 36,254.57 points, up 0.52%.