The legal matters dragging since last 3 years reaches its final settlement at a cost of $6.7 million.
In an announcement to Australian Securities Exchange, mining services provider Macmahon Holdings Limited stated that the class action proceedings related to market disclosures on a construction project undertaken in the year 2012 have finally being agreed to be settled with the Federal Court of Australia. The proceedings first commenced in November 2015 in the Australian court which is now reported to be taking the final close as at 4 October 2018.
But the settlement comes at a cost of $6.7 million, inclusive of interest and applicant’s legal costs. Macmahon Holdings (ASX: MAH) told that impact of full and final settlement of proceedings will be recorded in fiscal year 2019 which would considerably affect the income statement by the recognition of $6.7 million as one-off charge incurred in FY19.
In justification to the legitimate nature of the settlement, Macmahon’s Chairman, Mr. Jim Walker stated that the decision of settlement was a commercial matter which has been taken in the best interest of Macmahon’s shareholders. He further added that the company still denies any wrongdoing in this matter and the settlement of this legal dispute is not driven by any admission of liability or a finding against the company or its members.
With the closure of this long-held dispute, the management of Macmahon Holdings Limited would be able to better concentrate in the core business of the company, having no risks of further distraction and expenses on lengthy trials. However, the completion of settlement remains subject to court’s approval.
The Annual General Meeting of the company is due to be held on 2 November 2018.
On the news of final settlement of class action, the shares of Macmahon Holdings Limited were spotted in green. The share price has gone up by 0.755% to last trade at $0.267 on 4 October 2018. The stock has seen a performance change of +20.45% over the past one year while it most recently traded at a PE of 16.260 x with market capitalization of $571.07 million.
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