Nufarm settles class action suit for $A43.5m
BUSINESSDESK: Agricultural chemicals company Nufarm said it has reached a $A43.5 million conditional settlement of class action proceedings brought against it in early 2011 and which alleged material non-disclosure and over-optimistic profit forecasts in 2010.
Nufarm had previously denied all allegations of wrongdoing and had said it would vigorously defend the case.
Chairman Donald McGauchie said that in agreeing to settle, Nufarm's board “carefully considered risks and costs associated with a protracted litigation and demand on management's time".
“We are pleased to put this matter behind us and have the company fully focused on continuing to improve the operating performance of the business.”
The lawsuits brought by law firms Maurice Blackburn and Slater & Gordon reportedly had attracted hundreds of disgruntled investors who bought Nufarm shares between September 2009 and August 2010 and had been scheduled to go to trial in September 2013.
Nufarm said the settlement covers the claims, interest and costs of the litigation funders and applicants' legal fees. It is subject to court approval which, if obtained, will see the class action dismissed without admission of liability by Nufarm.
The settlement will be recorded in its accounts for the year ended July 31. Last month, Nufarm said it expected underlying net profit for the year would be between $A110 million and $A116 million compared to $A98.1 million last year.
For the year ended July 31, 2011, it reported a bottom-line loss of $A49.5 million compared to an $A22.7 million loss the previous year.
The company expects to release its results on September 27.
Nufarm shares fell 1.7% to A$5.38 on the ASX yesterday. The stock has jumped 31% this year.
Nufarm's NZ-listed perpetual, subordinated, unsecured, redeemable exchangeable notes last traded on July 26 at $96 per $100 face value.
While well above their low at $85 per $100 in the middle of last year, the notes have been trending lower since hitting $104.50 late last year.