ELTEK ASA - LAWSUIT INITIATED WITH CLAIM FOR DAMAGES FOLLOWING THE DIVESTMENT OF NERA NETWORKS AS
(Thomson Reuters ONE) -
Eltek completed on 19 January 2011 the divestment of Nera Networks AS to Ceragon
(UK) Limited, a wholly owned subsidiary of Ceragon Networks Ltd (together,
"Ceragon") pursuant to a share purchase agreement of same date (the "Share
Purchase Agreement"). The purchase price was USD 48.5 million on a cash and debt
free basis. For further details on the transaction reference is made to the
stock exchange announcement made on 19 January 2011 and the Information
Memorandum of 15 February 2011 (as announced on 22 February 2011). Pursuant to
the terms of the Share Purchase Agreement, Eltek provided an extensive set of
representations and warranties for a period of 18 months, i.e. up to 19 July
2012, except for representation and warranties relating to title and tax for
which the survival period is up to 10 years. USD 10 million of the purchase
price was paid in escrow for 18 months to cover potential breaches of the
representations and warranties as mentioned above.
On 17 July 2012, Eltek announced that it on 16 July 2012, had received a claim
from Ceragon for alleged breaches of representations and warranties under the
Share Purchase Agreement. The claim consisted of several items that have been
aggregated into one claim notice and set out alleged losses for which damages is
sought of approximately USD 18.6 million. In addition, Ceragon in the claim
notice referred to additional exposure related to tax, which allegedly may
become a loss for which a claim will be made. Based on the very limited
information and documentation provided in the claim notice, Eltek found it
difficult to consider whether there was at all any merits in the claims.
Ceragon has on 24 June 2013 filed a writ of summons with the Oslo district court
(NO: Oslo tingrett) for alleged breaches of representations and warranties under
the Share Purchase Agreement. The claim consists of several items and sets out
alleged losses for which damages are sought of approximately USD 21.5 million.
Eltek has not yet received the exhibits to the writ of summons. When the
exhibits are received Eltek will further review the writ of summons and the
documentation provided to Eltek to determine whether there is any basis for any
of the alleged breaches of representations and warranties under the Share
Purchase Agreement pursuant to which valid claims under the Agreement may be
made.
Eltek underlines that the total liability for Eltek under the Share Purchase
Agreement is limited upwards to USD 22 million, except for the liability
relating to title, tax and illegal payments, which is limited to the purchase
price, USD 48.5 million. These limitations can only be set aside if there is
gross negligence, wilful misrepresentation or wilful misconduct, or fraud on
Eltek's side, which Eltek denies is the case.
Eltek will also note that according to the Share Purchase Agreement, Ceragon
shall not have the right to be compensated unless and until a single loss or the
sum of related losses in the aggregate is/are in excess of USD 200,000 (the Mini
Basket Amount). Several items of the claim are below the Mini Basket Amount, and
consequently not recoverable under the Share Purchase Agreement.
Finally, several of the claims apparently relate to contingent claims, i.e.,
claims where no loss yet have been suffered by Ceragon. Eltek rejects that there
is any basis for liability for such claims.
For further information, please contact:
Erik Thorsen
Chairman of the Board of Eltek ASA
+47 907 56 685
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Eltek ASA via Thomson Reuters ONE
[HUG#1711714]
Unternehmensinformation / Kurzprofil:
Datum: 25.06.2013 - 08:27 Uhr
Sprache: Deutsch
News-ID 272769
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