Griffin has agreed to pay A$7.5 million (Rs42 crore) to Perdaman, in addition to legal costs to be ascertained by the court.
Griffin Coal, a unit of infrastructure company Lanco Infratech, and Perdaman Chemicals have opted for an out-of-court settlement of their legal dispute in the Supreme Court of Western Australia over coal supply.
Griffin has agreed to pay A$7.5 million (Rs42 crore) to Perdaman, in addition to legal costs to be ascertained by the court.
In 2011, Perdaman had filed a case seeking A$3.5 billion from Griffin in damages for reneging on its commitment to supply coal to its upcoming fertiliser plant.
Lanco was refuting the charges up until now.
However, Lanco officials said that considering the resources like time and money (legal costs) the litigation would require, the company had decided to settle the dispute, in accordance with the court rules that allow for early and cost-effective resolution of such claims.
“If allowed to continue, this case would have taken another 12-14 months for the trial and judgment... (We decided to) move forward with our mine expansion plans,” a Lanco statement said.
Lanco is now gearing up to start work on its coal project in Western Australia, including the proposed expansion of the Collie mine and the enhancement of the export facilities at the Bunbury port.
“We will expand the project from 4 million tonne to 15 million tonne,” said Nagaprasad Kandimalla, CEO of Lanco’s business development division.
The company is eyeing financial closure for the expansion in the next 12 months. The project is being taken up with an outlay between A$900 million and A$1 billion. About 30-35% of the cost is estimated to be infused in the form of equity.
“We believe the out-of-court settlement is sentimentally positive and the inherent value of Lanco’s power assets, in light of likely settlement of fuel issues, makes the stock attractive,” Edelweiss said in a report on Monday.
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