Brazilian pulpmaker Eldorado Brasil Celulose SA’s controlling shareholder, conglomerate J&F Investimentos SA, and Netherlands-based Paper Excellence, which agreed to buy Eldorado a year ago, are disputing the final price and the deal will not close as scheduled next week, one source with knowledge of the matter said on Wednesday.

Brazilian newspapers had reported the dispute earlier on Wednesday.

Under the terms of the contract, the parties had one year to Sept. 2 to close the transaction at the price agreed upon nearly a year ago, the reports said. Paper Excellence, controlled by the owners of Indonesia’s Asia Pulp & Paper Co Ltd, agreed to buy Eldorado for 15 billion reais ($3.61 billion).

But now J&F wants a higher price for Eldorado in light of a local currency devaluation and rise in international pulp prices, newspapers O Estado de S. Paulo and Valor Economico reported, citing unnamed sources.

A person with knowledge of the matter said arbitration would begin if the deal does not close on Sept. 2 in the International Chamber of Commerce, chosen by the parties to rule on disputes. The source asked for anonymity because the person is not authorized to discuss the matter publicly.

J&F alleges Paper Excellence did not comply with all conditions to close the deal. The reports said the parties may take the dispute to arbitration.

J&F declined to comment. Paper Excellence said all conditions to close the deal were met. “Paper Excellence is ready to close the deal and has had the 10.8 billion reais needed to conclude the transaction available since July,” it said.

 

Source: reuters.com

Report Abuse