* Says GCL Botswana files arbitration notice in Hong Kong
* Says notice filed by power project partner
* Says GCL’s claim without merit
* CIC shares tumble 35 pct
Feb 24 (Reuters) - CIC Energy Corp said its partner in a power project in Botswana filed a notice of arbitration over a power purchase and a coal supply agreement, potentially jeopardizing the Canadian coal miner’s buyout deal with an Indian power utility.
Shares of CIC, whose buyout by JSW Energy Ltd is set to close on Monday, crashed 35 percent to C$3.66 on Thursday afternoon on the Toronto Stock Exchange. They were halted in the morning session.
In August, CIC and GCL Botswana signed an agreement for a 300 megawatt power station and an associated coal mine that would be built at CIC’s Mmamabula coalfield in Botswana.
CIC would own a 30 percent equity stake in the project, while GCL, an indirect subsidiary of Hong Kong based-Golden Concord Holding Group Ltd, would own the rest.
GCL claims that CIC’s unit has a contractual obligation to agree to a power purchase agreement and a coal supply agreement, CIC said in a statement on Thursday.
CIC said that GCL’s claim is without merit.
CIC had agreed to a C$422 million, or C$7.75 a share, buyout offer from JSW Energy in November.
CIC shares have not touched JSW’s offer price since the bid was made in late November.
The merger agreement between CIC and JSW states that the closing of the deal is conditional on the fact that there should be no outstanding liabilities or obligations between CIC and GCL.
CIC said it is in talks with GCL to resolve the dispute and that it had not yet discussed the matter with JSW.
The notice of arbitration is filed with the Hong Kong International Arbitration Center against CIC’s unit, CIC International Corp. (Reporting by Arnika Thakur in Bangalore; Editing by Anne Pallivathuckal)