CIMC Enric terminates agreement to acquire Sinopacific Offshore & Engineering

CIMC Enric, affiliate of China International Marine Containers (CIMC), said that certain terms of the purchase deal cannot be fulfilled, leading to the termination of the take over of SOE, subsidiary of Sinopacific Shipbuilding Group.

CIMC Enric explained that the entire equity interests of SOE have been “seized by the PRC courts and therefore not free from encumbrances and disputes.”

The company added that it found that the sellers had “breached certain material terms (under the agreements), including that the net asset value of the target company [SOE] before completion of acquisition was found to differ substantially from the net asset value of the target company as of 31 May 2015.”

CIMC Enric was orginally supposed to buy 63.31% equity stake in SOE from seller Sinopacific, as well as to follow up with acquiring over the remaining 36.69% stake of SOE from Evergreen Holding Group (EHG), parent firm of Sinopacific.

“After due and careful consideration and after consulting with our legal advisers, the board decided not to proceed with the acquisitions,” CIMC Enric said in a statement released to the stock exchange.

CIMC Enric is now seeking a refund of RMB178.63m ($27.14m) from Sinopacific and EHG in pre-payments and interests.

Meanwhile, CIMC Enric has also terminated a financial assistance framework agreement of offering RMB1.5bn of funds to SOE, in line with the cancellation of the acquisition deal.

Privately-owned Sinopacific has been struggling to stay afloat amid the severe shipbuilding industry crisis, while its parent firm EHG has also faced financial difficulties and defaulted on bond payments.