Germany’s Leoni AG reports that the May 21 announced sale of its Business Group Automotive Cable Solutions business to Thailand’s STARK Corporation Public Company Limited (STARK) has been upended.
A press release said that the buyer, STARK, “unexpectedly demanded very significant amendments to the purchase agreement.” It added, “Despite willingness to compromise on the side of Leoni, STARK refused to agree and will not perform the closing.”
Leoni said that it sees the actions as a breach of the contract, and will “take all measures to enforce its rights against STARK.” It noted that the sale was important as it is the basis for the financing of the Leoni Group until the end of 2025. Leoni has signed a comprehensive contractual documentation of the refinancing plan with its syndicate banks and borrower’s note holders on the basis of the agreement in principle reached in July 2022. An essential prerequisite for its implementation, however, is a partial repayment of financial liabilities with proceeds from the sale. As a result of the non-performance of the contract by STARK, the refinancing plan cannot be implemented for the time being.
The release did not state what changes STARK requested. STARK is a private organization which focuses on investment in manufacturing and services in the industrial sector. It has been registered as a public organization since 2019 and mainly runs the business of Phelps Dodge International (Thailand) Limited. In 2020, it partnered with Thai Cable International, a leading manufacturer and distributor of copper and aluminum conductors in Thailand, and Thinh Phat Electric Cable Joint Stock Company, a major wire and cable manufacturer from Vietnam.
STARK did not respond to a WJI request for comment.