11th Dec 2019 14:44
(Alliance News) - Gama Aviation PLC said Wednesday it is making progress in sorting through the legal proceedings from its Hangar 8 legacy case.
In late 2014, Hangar 8 acquired Gama Aviation in a reverse takeover and issued shares in order to cancel debt and provide working capital to the new business. Hangar issued 27.3 million shares, valuing the deal at GBP82.3 million.
Since then, Gama Aviation has faced a number of legal proceedings, relating to historic unrecorded liabilities in its Hangar 8 business.
On Wednesday, the company said it has settled one of those legacy claims.
Gama Aviation reached an agreement with SPC Aviation Ltd. Under the settlement, SPC has released its various damages claims against the Gama Aviation totalling some USD4.4 million and Gama Aviation has released its counterclaim against SPC in respect of historic trade receivables totalling some USD1.3 million.
"As previously reported these receivables have been fully provided for in the company's financial accounts. Accordingly, the terms of the settlement will have no impact on the underlying financial results of the company," Gama said.
Elsewhere, Gama Aviation said it has won USD1 million in its proceedings against Igho Sanomi and associated entities, Taleveras Petroleum Trading DMCC and Taleveras Group of Cos Ltd.
Gama was pursuing the recovery of trade receivable totalling USD3.1 million.
"This follows 3 previous judgements obtained over the last 12 months and brings the total awards by the courts to some USD2.5 million plus interest and legal costs. Proceedings for the remainder of the unpaid trade receivables are continuing and the company is now pursuing the collection of the sums awarded," Gama added.
Finally, the company said it is in the final stages of litigation in a Parisian court against Asecna.
Gama said: "The final hearing took place in November and the judgment is expected in January 2020. Any potential liability ruled against Hangar 8 has been fully provided for in the company's financial accounts and will have no impact on the underlying financial results of the company."
The company's overall legal costs for these three matters is expected to be about GBP1.7 million and will be included in its exceptional items, but is not expected to have an impact on the underlying financial results of the company.
Chief Executive Marwan Khalek said: "The company welcomes the settlement of the SPC Aviation case, the continuing progress on the Taleveras case and the imminent conclusion of the Asecna case. In aggregate the board continues to anticipate a net cash inflow as an overall result of all litigation matters subject to the successful collection of the Taleveras trade receivables."
Shares in Gama Aviation were trading 0.1% higher in London on Wednesday at 62.06 pence each.
By Paul McGowan; [email protected]
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