Barry Callebaut's purchase of the Petra Foods cocoa operations, which landed the Swiss chocolate giant with a round of credit downgrades, has brought it into a dispute too, over claims for a cut of nearly $100m to the purchase price.
Barry Callebaut, which makes chocolate on behalf of labels such as Nestle and Kraft, has pressed Singapore-based Petra for a further cut to the headline $950m purchase price of the business, a deal which promoted it to top rank among world cocoa processors, by sales.
On top of an adjustment for lower working capital, made in June as the acquisition formally closed, Barry Callebaut has claimed a further "adjustment" to take the total reduction to $98.3m.
However, Petra Foods, while agreeing in June to cut the sales price to $860m, has refused to accept the additional discount.
"The price adjustments sought by Barry Callebaut do not have a proper or valid basis, and/or have not been properly substantiated or justified," Petra Foods said in a statement.
Barry Callebaut, which issued its fresh deal financials on September 23, was "out of time" to seek any changes, which were "not compliant" with the law, nor with a deal sale and purchase agreement signed at the end of June.
However, Barry Callebaut itself said that it, and Petra, would "now have to apply the dispute resolution mechanism foreseen in the sale and purchase agreement".
The dispute will not affect the operational performance of the operations acquired, nor their integration into the Barry Callebaut, the Zurich-based company added.
The clash represents the latest headache for the group following the acquisition, which also cost the group its coveted investment grade credit rating from Moody's.
After the Moody's downgrade, in May, Barry Callebaut finance director Victor Balli issued a statement saying that the group was "fully committed to go back to investment grade within the next few years", even though investments such as that of the Petra cocoa business "might temporarily affect our profitability, balance sheet ratios and cash generation".
Barry Callebaut paid for the acquisition in part through a $400m bond issue and a $300m share sale, with loans making up the remainder.
Petra Foods said that it had received net proceeds so far from the sale of $164m.
Barry Callebaut shares stood 1.4% lower at SFr914.00 in lunchtime deals – in line with the level at which they stood when the deal was announced in December.
Petra Foods shares closed up 0.3% at Sing$3.51 in Singapore, up some 28% since before the cocoa deal.