AEROSPACE group Hampson Industries has agreed a £1.5m payout to a consortium of private investors led by Midland industrialist David Grove following the loss of a High Court legal action .
The Black Country firm has also agreed to make a contribution towards the consortium’s costs.
The consortium, which represents Skelmersdale-based Erlson Precision Components, formerly Hampson Precision Automotive (HPA), took the action after it alleged Hampson failed to disclose full details about the state of HPA’s customer relationships prior to the £2.5m deal last June.
In particular, it said it had not informed the group of investors that at the time of the deal one of HPA’s main customers – Cummins Turbo Technologies – was set to pull out of its dealing with the firm.
The consortium said the decision to purchase the company had therefore been based on unreliable forecasts for the business.
Following a High Court ruling in April in favour of the consortium, Hampson was ordered to re-acquire the shares in the capital of HPAL and to reimburse Erlson with the original £2.5m outlay.
Hampson said it was considering appealing the ruling of Mr Justice Field.
However, in a new statement to the London Stock Exchange, Hampson said it had reached a settlement with the consortium.
It said: “Both parties concluded it was in their and HPAL’s best interests to agree that HPAL should be retained by Erlson. Hampson has agreed to pay £1.5m to Erlson and to make a contribution to Erlson for the costs it incurred in the litigation. This will be accounted for under discontinued operations in the year ended March 31, 2011.”
Hampson chairman Chris Geoghegan added: “While we were disappointed with the original ruling, the board is pleased to have come to a final agreement with Erlson which enables us to put this issue behind us.”
Mr Grove has declined further comment on the matter
In a brief update, Hampson said trading continued to be in line with management expectations for the current financial year. The group is due to announce its preliminary results for the year ended March 31, 2011 on June 30.
