Forsys Metals Corp (FSY.TO: Quote) said George Forrest International Afrique SPRL sought more time to complete the financing for its acquisition of the uranium producer amid the weak economy, sending Forsys' shares plummeting 32 percent.

The closing date of the proposed merger was extended to a date still to be determined but not later than July 31, Forsys said in a statement.

In November, the company had agreed to be acquired by George Forrest in a deal valued at C$579 million, or C$7 per share, in cash. The deal was previously expected to close by March 18.

Forsys said the purchase price remains at C$7 ($5.50) per share, but raised the reverse break fee George Forrest would be liable to pay to C$20 million from C$11.4 million if it breaches the agreement.

By March 31, George Forrest would also have to provide security for the entire amount, Forsys said.

Forsys shares fell to a low of C$3.57 before paring some losses to trade down more than 30 percent at C$3.65 Friday afternoon on the Toronto Stock Exchange. ($1=1.272 Canadian Dollar) (Reporting by Ashutosh Joshi in Bangalore; Editing by Deepak Kannan)

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