Lanco Infratech Ltd's Australian subsidiary Griffin Coal has terminated a coal supply agreement (CSA) with Australia's Perdaman Chemicals and Fertilisers Pty Ltd, citing non-compliance with a condition for financial closure.
"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 closure including certain terms and conditions in line with the CSA," Lanco Infratech said in a statement.
This offer is open for acceptance by Perdaman until 6 September 2011, it added.
According to media reports, Perdaman would offer its comments only by Friday as Wednesday and Thursday are public holidays in the country.
Lanco and Perdaman are engaged in a legal battle primarily over the coal supply agreement.
As per an earlier contract, Griffin was to supply 2.8 million tonnes coal per annum to Perdaman's upcoming two million tonnes Collie urea project in Western Australia.
Earlier on 12 August 2011, the Supreme Court of Western Australia dismissed a lawsuit filed by Perdaman that sought to restrain Lanco Infratech from securitising Griffin coal assets. (See: Court dismisses Perdaman Chemicals' law suit against Lanco Infratech)
Lanco bought Griffin Coal in a deal valued at up to $850 million last December, joining the bandwagon of Indian firms looking at acquiring coal mine assets in Indonesia, South Africa and Australia.
Lanco shares rose as much as 9.3 per cent on Tuesday and closed 6 per cent higher in a Mumbai market that closed up 1.9 per cent.