Court ruling in the penalty fee dispute in Ulsan, South Korea
The civil court in Ulsan has announced their decision today regarding the ongoing dispute with Ulsan City concerning the contractual obligation to invest in a gas upgrading facility at the Ulsan site by the end of 2017.
The court ruling is unfavorable to the Group and implies that Ulsan City are entitled to an annual fee estimated to approximately SEK 8-9 million, instead of the by the Group expected circa SEK 3 million per year. The recorded penalty expense for the period January-June 2018 is approximately SEK 3,6 million, which though corresponds to the court’s ruling. The Group has the opportunity to appeal the decision.
According to the annual report 2017, the net present value of the total accrual in the consolidated balance sheet as at 31 December 2017 was approximately SEK 25 million, corresponding to a nominal value of approximately SEK 55 million.
The total nominal value of the gas penalty, for the entire contract period, is estimated at approximately SEK 140 million, subject to annual gas sales volumes, prices and exchange rates.
The Group is analysing the decision and evaluates various legal and business options.
For additional information about, and the background to, the dispute, see Penalty fee in Ulsan on page 32 in the 2017 annual report on www.scandinavianbiogas.com.
For further information, please contact:
CEO Scandinavian Biogas
+46 (0) 70-597 99 38
The company in brief:
Scandinavian Biogas is today one of the largest private producers of biogas as a vehicle fuel. The Company also operates a manufacturing plant for pre-treatment of food waste and industrial organic waste, as well as a plant for the production of raw biogas in South Korea.
This information is information that Scandinavian Biogas Fuels International AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 15:45 CEST on 23 August 2018.