FHL gives up BP acquisition ghost

July 24, 2009 05:10:38 PM

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Indigenous Fijian investment group Fijian Holdings Ltd today announced the termination of its proposed acquisition of oil giant BP South West Pacific Ltd’s business in the Pacific, citing delays beyond its control as a major contributing factor to its decision. 

In a statement issued at the South Pacific Stock Exchange, FHL managing director Sereana Qoro said: “Both parties have mutually agreed to terminate the Sale & Purchase agreement signed in December 2008.  As per the agreed conditions, BP SWP will return 100 percent of the original deposit and additional deposits totaling USD $12,336,500 which amounts to approximately FJD $25,000,000.”

“It is a business decision reached amicably by FHL and BP SWP considering the time and effort the project has taken to date.  FHL has exercised its best endeavours in dealing with international banks, but the delay was beyond our control,” Qoro said.

FHL announced in December last year that it had won the bid to acquire BP South-West Pacific Limited’s Pacific oil businesses via Fijian Holdings Energy Ltd, a newly created subsidiary.

The purchase however had met with a major of setbacks when initial funding partner, the Fiji National Provident Fund pulled out of the deal, forcing FHL to look internationally to finance the F$190 million deal.

Since then, FHL has had to announce a number of delays in securing finances, the latest of which was last week.

In today’s announcement, Qoro said it was not the end of the road for FHL.

“In fact, the divestment of Foster’s shares and the refund of the full BP deposit to FHL puts FHL in a much stronger position in terms of cash flow and net asset position,” she said.