19th Sep 2013 09:10
LONDON (Alliance News) - Diamond Wood China Ltd Thursday confirmed that it is taking Accsys Technologies PLC to arbitration in an attempt to enforce an agreement that Accsys has terminated and to seek damages of over EUR140 milllion.
The two companies are in dispute after Accsys terminated a deal under which Diamond Wood would exclusively manufacture and sell Accoya Wood in China and parts of South East Asia. Accsys has previously said that Diamond Wood failed to make progress on the construction and operation of an Accoya acetylation plant in China, "despite the significant amount of support and work carried out by Accsys since 2007."
"Diamond Wood is still yet to understand as to the motivations behind such a move but is committed to defending its rights vigorously in the arbitration," Diamond Wood's Chairman and Chief Executive David Sumner said in a statement.
Accoya wood is an acetylated wood used for things like external building cladding. The treatment claims to make softwood as durable as hard wood.
Diamond Wood has said it is unable to complete a fundraising process it had started to try and fund the completion of the acetylation plant thanks to the scrapping of the deal. It has also scrapped plans for a listing in Singapore.
"The listing would have provided Diamond Wood the funding required to execute on its business plan and provide Accsys with its first royalty paying Accoya licensee," Sumner said.
In a separate statement, Accsys said it would fully engage in the arbitration process and, after taking legal advice, was very confident it would be resolved in its favour.
In a trading statement, Accsys Chief Executive Paul Clegg said the company's royalty revenues had risen 91% to EUR13.6 million in the five months to the end of August compared with the year-earlier period.
Accsys shares were up 3.7% at 0.14 pence Thursday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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