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Redhall Group plc, the specialist engineering support services group, is pleased to announce the final settlement of all aspects of the Vivergo Fuels Limited (“Vivergo”) contract.
Following a series of discussions held subsequent to the judgement being handed down on 16 December 2013 and ahead of the Cost Hearing scheduled for 29 January 2014, Vivergo made an offer of £2.1 million in full and final settlement of all claims between the parties to be paid in cash within 5 days.
This offer falls considerably short of the amounts the Board believed were recoverable based on the views of its professional advisers throughout the legal process. However, the protracted timetable for recovery of monies through further legal proceedings; the uncertainty as to the ultimate outcome of such proceedings; and the cost and cash outflow implications pose an unacceptable level of risk to the Group. Accordingly the Board has today, after careful consideration, accepted the offer of £2.1 million which it believes is in the best interests of Redhall’s stakeholders.
The carrying amount of the Vivergo contract on the balance sheet at 30 September 2012 was £9.8 million and therefore there will be an exceptional charge in the Financial Statements for the year ended 30 September 2013 of £7.7 million before tax and legal and professional costs incurred in reaching this settlement.
The net cash proceeds will be used to extinguish in part the newly increased and extended bank facilities which were announced on 9 January 2014. Other than for this aspect, the new banking arrangements remain unaffected by the settlement.
Richard Shuttleworth, CEO, commented “We are pleased that in reaching this settlement we can draw a line under the matter. Whilst the settlement is not at the value we had anticipated, with our new banking facilities we can now focus our resources on growing the business which has made a positive start to 2014”.
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