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International arbitral tribunal awards help Lectra
30 Oct '09
2 min read
The Secretariat of the International Court of Arbitration notified the award in the arbitration initiated in June 2005 by Lectra against Induyco, the former shareholder of Investronica Sistemas, under the arbitration rules of the International Chamber of Commerce.
The award of €21.9 million by the arbitral tribunal is composed of:
• award on the merits: €15.1 million (plus interest since June 30, 2005 and post-award interest)
• award as costs: €6.8 million (plus post-award interest).
The arbitral procedure relates to the acquisition by Lectra in 2004 of Investronica Sistemas
The parties agreed in the share purchase agreement signed on April 2, 2004 that disputes arising out of or relating to the agreement would be finally settled by international arbitration.
Induyco provided Lectra with first demand bank guarantees for a total amount of €17.2 million.
Impact of the award on Lectra's financial statements and cash flow
The company will proceed with its auditors to a detailed analysis of the accounting and tax treatment of the award, which will be fully accounted for in the December 31, 2009 financial statements that will be published on February 11, 2010.
The aggregate amount of legal and expert fees, procedural and other costs incurred by Lectra since the beginning of the procedure amounts to €9.9 million. Of this amount, €4.2 million were expensed in the 2005 and 2006 accounts, and €5.7 million incurred in the years 2006–2009 were recognized in current assets in the balance sheet at September 30, 2009.
As all €9.9 million costs incurred by Lectra have already been paid in full, the award upon satisfaction will result in a cash inflow equal to the total amount of the award, i.e. €21.9 million.
With nearly 1,500 employees worldwide, Lectra is the world leader in software, CAD/CAM equipment and related services specially created for large-scale users of textiles, leather and industrial fabrics. Lectra serves a broad array of major global markets including the fashion, automotive, and furniture industries, as well as a wide variety of other sectors, such as the aeronautical and marine industries, wind energy, etc.
The award of €21.9 million by the arbitral tribunal is composed of:
• award on the merits: €15.1 million (plus interest since June 30, 2005 and post-award interest)
• award as costs: €6.8 million (plus post-award interest).
The arbitral procedure relates to the acquisition by Lectra in 2004 of Investronica Sistemas
The parties agreed in the share purchase agreement signed on April 2, 2004 that disputes arising out of or relating to the agreement would be finally settled by international arbitration.
Induyco provided Lectra with first demand bank guarantees for a total amount of €17.2 million.
Impact of the award on Lectra's financial statements and cash flow
The company will proceed with its auditors to a detailed analysis of the accounting and tax treatment of the award, which will be fully accounted for in the December 31, 2009 financial statements that will be published on February 11, 2010.
The aggregate amount of legal and expert fees, procedural and other costs incurred by Lectra since the beginning of the procedure amounts to €9.9 million. Of this amount, €4.2 million were expensed in the 2005 and 2006 accounts, and €5.7 million incurred in the years 2006–2009 were recognized in current assets in the balance sheet at September 30, 2009.
As all €9.9 million costs incurred by Lectra have already been paid in full, the award upon satisfaction will result in a cash inflow equal to the total amount of the award, i.e. €21.9 million.
With nearly 1,500 employees worldwide, Lectra is the world leader in software, CAD/CAM equipment and related services specially created for large-scale users of textiles, leather and industrial fabrics. Lectra serves a broad array of major global markets including the fashion, automotive, and furniture industries, as well as a wide variety of other sectors, such as the aeronautical and marine industries, wind energy, etc.
Lectra
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