Glenwood files $40 mn arbitration claim against Baring PEA

Glenwood Private Equity has filed an arbitration claim of about 50 billion won ($40 million) against Baring Private Equity Asia (Baring PEA), after the latter abruptly dropped a $1 billion deal to buy PI Advanced Materials Co.

Last month, Glenwood PE submitted a request for arbitration to the Singapore International Arbitration Center to resolve its dispute with Baring PEA, according to people with knowledge of the matter on Friday.

It claimed Baring should be held accountable for the cancellation of the agreement signed in June of last year and thus must pay 5% of the acquisition price as stipulated in their contract.

Under the contract, Baring PEA had agreed to purchase a 54.07% stake in South Korea-based PI Advanced, the world’s largest polyimide film manufacturer, for 1.3 trillion won ($1 billion).

Separate from the arbitration claim, Glenwood does not plan to seek damages nor pursue other legal action to push through with their agreement.

In response, Baring PEA argued that it had scrapped the deal with due process and therefore, it is not liable for a penalty.

A Baring source said that the deal cancellation was blamed in part on the failure to win Chinese authorities’ approval, which led to its conclusion that the deal could not be closed within the agreed-upon period.  

Baring PEA withdrew from the deal after the share price of PI Advanced plummeted to the 20,000 won range on the back of higher interest rates in the second half of last year.

In June 2022, its share price hovered around 50,000 won.

For the arbitration claim, Glenwood PE is represented by South Korea’s largest law firm Kim & Chang and Los Angeles-based Quinn Emanuel Urquhart & Sullivan.

(The arbitration claim was corrected to 50 billion won ($40 million))

Write to Dong-Hun Lee at leedh@hankyung.com

Yeonhee Kim edited this article.