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Per dam an f i s l w t i Aust r al agai st I C C Bank - Li em i t e l a sui n a n i I I v n

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Thu, Jan 10 2013. 10 33 PM IST

Perdaman files lawsuit in Australia against ICICI Bank

Perdaman claims the Indian bank restrained Griffin Coal Mining from supplying coal to the project
Hyderabad: Australia-based Perdaman Chemicals and Fertilisers Pty Ltd on Thursday said it filed a lawsuit in Australia against ICICI Bank Ltd seeking damages worth A$3.2 billion (around ` 18,473 crore today), claiming that the Indian bank restrained Griffin Coal Mining Co. Pty Ltd from supplying coal to the project. Griffin Coal was acquired by Indian power producer Lanco Infratech Ltd through its Australian subsidiary Lanco Resources Australia for A$720 in February 2011.

ICICI Bank funded the Griffin acquisition through debt syndication of

$800 million (`4,368 crore today). Lanco is locked in a legal battle with Perdaman over a coal-supply agreement. Perdaman alleged in the petition that ICICI Bank deliberately engaged in interference in the financing of its urea fertilizer project as part of Lancos push for higher prices. Photo: Ramesh Pathania/Mint In May 2011, Perdaman filed a A$3.5 billion lawsuit against Lanco for terminating the coal-supply agreement that was in place before its acquisition of Griffin Coal.

Perdaman claimed that it spent nearly A$195 million on the project and the termination prevented it from getting financing for the construction of the urea fertilizer plant at an estimated value of A$3.39 billion. Perdaman alleged in the petition that ICICI Bank deliberately engaged in interference in the financing of its urea fertilizer project as part of Lancos push for higher prices. ICICI did not respond to queries seeking comment. The case is between Perdaman and Lanco, said Vaibhav Agrawal , vice-president, research, at Mumbai-based brokerage house Angel Broking Ltd. Under no circumstances will the court hold ICICI Bank, which is just a lender, responsible. Agrawal said the A$3.5 billion damage claims are unjustified. Lanco has denied Perdamans charges and is contesting the case before the Supreme Court of Western Australia. Lanco has said that giving security guarantees to ICICI was necessary to finance its purchase of Griffin. Lanco clarified in a statement that ICICI Bank had no contractual relationship with Perdaman. The case being referred to currently, the same case, as was filed against us 19 months back in May 2011, which we believe is baseless...will be decided in our favour very soon, the company said in a statement. The petition is aimed at nuisance value, said Lanco chief executive for business development, Nagaprasad Kandimalla , speaking over the phone from Australia. He rejected Perdamans claim of investing A$195 million. Perdaman couldnt be immediately reached for comment. Lanco in December got a favourable ruling from the Supreme Court of Western Australia in a lawsuit filed by Perdaman. The court allowed Lanco to revise a coal-supply agreement with Bluewaters Power Station that relies on Griffin Coal. The Indian company said the revised coal-supply agreement will result in a gain of approximately A$150 million in net present value terms, including a substantial upfront payment to Griffin Coal.

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Lanco, which made a loss of A$43 million in the year ended 31 March, has invested around A$132 million between 14 July 2011 and 23 October 2011. The company is looking for a strategic investor as it plans to spend $1.2 billion to augment Griffins mining capacity from 4mtpa to 18mtpa in three years. Lancos plans to develop and turn around Griffin Coal will rely on the outcome of these court cases, said an infrastructure analyst at a Hyderabad-based brokerage house who did not want to be named citing his companys policy. Shares of ICICI Bank were little changed at `1,179.15 on the BSE, while Lanco dropped 1.7% to `14.49. The benchmark Sensex was flat at 19,663.55 points. Bloomberg contrib uted to this story.

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