Indian conglomerate Lanco Infratech will pay Perdaman Chemicals and Fertilisers $7.5 million plus legal costs as settlement for a long-running $3.5 billion legal battle that erupted after Lanco purchased Griffin Coal Mining.
Lanco said it made the offer, which it described as nominal, to end the litigation and move forward with expansion plans for its Collie coal mine and export facilities at Bunbury Port.
Despite settling the legal action, Lanco said it maintained Perdaman’s actions were “baseless and without any merit”.
“If allowed to continue, this case would have taken another 12 to 14 months for the trial and judgement, resulting in significant legal costs and loss of management time,” Lanco chief executive NagaPrasad Kandimalla said in a statement.
The litigation originated in 2011 after Perdaman claimed Griffin Coal failed to comply with its obligations under a coal supply agreement for Perdaman’s planned urea plant.
Perdaman said today it would continue with its urea project and was in advanced discussions with alternative coal supplier, Premier Coal.
In a statement, it also repeated concerns about the health of Lanco's business.
"Perdaman has maintained its concerns as to Griffin and Lanco’s solvency and the commercial value of pursing its legal case – listed for 13 weeks hearing commencing in August 2013," the company said.
"Last week’s announcement by Lanco that it was 'trimming' its entire workforce by 20 per cent coupled with Lanco’s third quarter results showing losses for the 9 month period of approximately US$200 million heightened Perdaman’s concern as to the commercial utility of continuing with its case."
Perdaman also said it was confident that its world-leading coal gasification urea project will be implemented.
