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Sajjan Jindal-led JSW Energy scraps Canadian mines deal

Sajjan Jindal-led JSW Energy scraps Canadian mines deal

JSW Energy terminates its agreement to acquire CIC Energy Corp after the latter failed to get the required permissions from its government before the deadline of May 31, 2011.

Sajjan Jindal, chief of JSW Energy Sajjan Jindal, chief of JSW Energy
Sajjan Jindal-led JSW Energy has terminated its agreement to acquire Canadian coal miner CIC Energy Corp after the latter failed to get the required permissions from its government before the deadline of May 31, 2011.

The scrapping of the deal, which comes after several extensions to the deadline for getting the clearances, brings to an end eight months of hectic negotiations and due diligence for the $422-million acquisition bid. JSW Energy was keen to acquire CIC Energy Corp to secure raw material for its power plants in India.

"The agreement entered into with respect to acquisition (of the entire shareholding of CIC Energy Corp) stands terminated as the conditions precedent for merger could not be fulfiled by May 31, which was the last date for fulfiling the conditions by CIC," JSW Energy said in a communication to the Bombay Stock Exchange (BSE) on Tuesday.

CIC Energy had also informed the Toronto Stock Exchange about the termination of the deal. "CIC Energy believes shareholder interests will be better served by pursuing an alternative transaction," the company said in a filing to the stock exchange. "While CIC Energy is willing to continue discussions with JSW Energy, any such discussions would have to be on a nonexclusive basis," CIC said.

JSW Energy will now have to look for coal assets elsewhere, including Australia and Africa. The JSW Energy stock closed with a gain of 2.70 per cent at Rs 72.20 on the BSE on Tuesday.

Courtesy: Mail Today 

Published on: Jun 02, 2011, 8:50 AM IST
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