Monday 14th March 2005
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The settlement is on a no admissions basis and includes a refund of AUD$6.9 million by Repco to National Parts. The full terms of the settlement are confidential to the parties.
In a statement to the NZX today Repco said the settlement will not result in a charge against profit in the current financial year and will not affect Repco's future operations. Goodwill will be increased by the after tax amount of the refund and legal costs of the litigation, Repco not having recorded a profit on the earlier sale of CarParts to National Parts.
The litigation commenced in March 2003 and related to the sale by Repco of the CarParts automotive parts wholesale business to National Parts for AUD$32 million in June 2002. In April 2004 National Parts quantified its claims against Repco at AUD$15.6 million plus interest and legal costs.
Repco Chairman, Michael Brown, said the settlement will avoid the distraction and ongoing costs in pursuing further litigation, and enable management to focus totally on business operations and development plans.
The settlement amount will be funded from Repco's existing term debt facilities and will have no significant impact on future operating cash flows.
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