| CATEGORY: NEWS AND ANNOUNCEMENTS SECTOR: RETAILERS |
QXL pays £57m to settle Poland dispute |
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Thu 29 Jun 2006
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LONDON (SHARECAST) - Online auctioneer QXL Ricardo is to pay out £57m to get back control of its Poland subsidiary after three years of legal battles.
"Obtaining undisputed ownership of QXL Poland will have a material impact not only on the enlarged group's financial metrics, with a 200% plus increase in pro-forma earnings per share, but also significantly enhances our position in the important Eastern European region." chief executive Mark Zaleski said in a statement.
The conditional agreement will see QXL issue 566,000 settlement shares representing 24.28% of its enlarged share capital to the vendors of its Polish arm.
In exchange, QXL gets undisputed control of QXL Poland and related businesses and the settlement of the various civil disputes between the parties.
The dispute arose in 2002 when QXL claims its Polish arm issued new shares amounting to 92% of the company without its permission.
In its statement, QXL said it has decided to settle because of the significance of QXL Poland, which generated revenue and operating profits £18.2m and £7.9m respectively in the year ending March 2006.
Other factors were the length of time it has taken to progress the claims to date, the prospect of more prolonged litigation and the directors' belief that the settlement will facilitate a much faster and smoother integration of the Polish group.
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