19th Apr 2018 12:35
LONDON (Alliance News) - Home safety products developer Sprue Aegis PLC said on Thursday it disputes the allegations made by smoke alarms firm BRK that it was in breach of an agreement entered into back in 2010.
In April 2010, Sprue Aegis agreed to exclusively distribute the products of BRK Brands Europe Ltd, a contract which was extended for a further three years in April 2015.
Sprue Aegis received a 12 months written notice at the end of March 2017 to terminate the agreement, as well as notice of Sprue's obligation to pay the annual distribution fee of GBP2.9 million.
BRK Brands said the alleged breach of the agreement had severely damaged the company, and as it was not curable, terminated the agreement and did not purchase any stocks of unsold products.
The gross book value of the disputed stock of unsold products was GBP4.3 million as at the end of March 2018, and while discussions with BRK continue, Sprue Aegis said it cannot confirm when it will release its results for 2017.
In addition, Sprue Aegis said it has drawn down GBP3.0 million from its GBP7.0 million three-year revolving credit facility with HSBC Bank PLC.
Shares in Sprue Aegis were down 8.5% at 124.50 pence on Thursday.