Print

BUSINESS - Redhall accepts £2.1m to end Vivergo dispute

 
Engineering support services group Redhall Group plc has accepted a lower than sought-for payment to end its long-running legal dispute with Vivergo Fuels Ltd.
 
Following a judgement in favour of Redhall last month, both sides were to meet at a cost hearing on 29 Jan. However, Vivergo made an advance offer of £2.1 million in full and final settlement of all claims between the parties.
 
The offer, said Redhall, fell "considerably short" of what it believed were recoverable but it added that the deal was in the best interests of the engineering group's stakeholders.
 
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, a statement explained. 

Redhall's shares fell by nearly 15% on announcement of the settlement on 30 Jan. 
 
The carrying amount of the Vivergo contract on Redhall's balance sheet at 30 Sept 2012 was £9.8 million. This means an exceptional charge of £7.7 million for the year ended 30 Sept 2013 - before tax and legal and professional costs incurred in settling the dispute.
  
"We are pleased that in reaching this settlement we can draw a line under the matter," said Redhall CEO Richard Shuttleworth."Whilst the settlement is not at the value we had anticipated ... we can now focus our resources on growing the business which has made a positive start to 2014."

Related stories:
Redhall claims victory in dispute with Vivergo