Private equity firm Blackstone has taken its portfolio company Gateway Distriparks Ltd to an arbitration court to enforce a buyback agreement and recover its dues.
On completion of this agreement, Gateway Distriparks was to own a 99.8% stake in its subsidiary.
However, Gateway Distriparks failed to make the balance payment of Rs 560 crore and compensation at the rate of 15% per annum from 28 September to 28 December 2018, the logistics company told stock exchanges. It said it couldn't raise the funds due to unforeseen events in the debt market. Following this, Blackstone filed for arbitration, the company said.
Gateway Distriparks said it is in discussions to complete the transaction. Blackstone declined to comment.
Gateway Distriparks has made several attempts in the past to buy out Blackstone. The PE firm had rejected a previous offer for a buyback three years ago.
In August 2015, Gateway Distriparks offered to buy back Blackstone’s stake in the rail freight company for Rs 600 crore ($90 million then). At the time, the PE firm had also wanted to take the company public and had invoked the initial share purchase agreement signed between both parties in 2009, which promised an initial public offering.
Gateway Distriparks had listed another subsidiary, cold chain company Snowman Logistics, in September 2014. But it has resisted the public listing of its rail logistics subsidiary.
Gateway Rail Freight, which offers rail logistics container services, closed 2017-18 with revenue of Rs 802.71 crore as compared with Rs 760.9 crore the year before.