SFI is controlled by Ballarpur Paper Holdings BV (BPH), a step-down subsidiary of Ballarpur Industries.

According to reports in the business newspapers, the deal fell through as the buyer, Pandawa Sakti (Sabah) could not arrange for cash even after the extended deadline. Ballarpur has invoked performance guarantees of USD 50 million.

In a regulatory filing, BILT said: "Since the transaction has not been consummated within the above long stop date, BPH has terminated the SSA and is invoking the performance guarantees of USD 50 million furnished by the buyer," the company informed BSE.

Last September, Ballarpur Industries had announced that its subsidiary Ballarpur Paper Holdings BV would sell entire 98.08 per cent stake in its Malaysian arm Sabah Forest Industries. In 2007, BILT had acquired Malaysia’s largest paper company for USD 261 million.

The calling off of the deal comes after several extensions of the deadline. On February 8, 2016 BILT had said it had been extended to February 29 and then to March 31. Then on April 4, the company said it has extended it to May 16, 2016 on the buyer’s request.

On May 25, the company informed that it has again extended LSD to June 30, 2016 to acquire 50 per cent equity of SFI by the Malaysian firm.

For the financial year 2015, Ballarpur reported a loss of Rs 161 crore and the deal was crucial for the loss making company. Shares of Ballarpur Industries (BILT) ended flat at Rs 16.50 after the announcement of the deal falling through.