CSR joins James Hardie in cutting deal over leaky NZ schools
CSR [ASX: CSR], the ASX-listed building products maker, has reached a confidential settlement with New Zealand's Ministry of Education over leaky schools, seeing off the need for legal action.
The ministry, which oversees education policy and spending, has discontinued its legal action against CSR Building Products, a local subsidiary of the Australian firm, after settling the claim, Associate Education Minister Nikki Kaye said in a statement. Details of the settlement will remain confidential.
The ministry filed the proceedings last year as it embarked on a remediation programme on 800 buildings across more than 300 schools, with an estimated cost of some $1.5 billion.
"While the CSR product is only on a small number of schools, I'm very pleased to see the industry responding sensibly and allowing settlement to be reached without the need for court action," Kaye said. "Effective legal action will continue as needed to protect Crown assets, but it is only part of a much wider strategy to ensure delivery of the best possible learning environments for students and teachers."
When CSR was named as a party in the suit, it talked down its role saying its low level of market share of the product meant "any potential financial impact related to this action would not be material to the financial results of the company."
CSR's shares were unchanged at A$2.90 on the ASX in early trading today.
The settlement is the second in as many months, after James Hardie cut a deal just before Christmas, having it faced potential costs of up to US$47.6 million related to a slew of leaky building claims, including provision of US$15.2 million for the ministry's NZ$1.5 billion suit against cladding manufacturers.
At the time, James Hardie said its settlement won't have a material adverse impact on its business result, which would see the company support the ministry's remediation programme and support future property development around New Zealand.
The ministry is continuing its legal action against Carter Holt Harvey.