LONDON (Alliance News) - Berkeley Mineral Resources PLC Thursday said it has agreed a settlement with its former chairman, Masoud Alikhani, and his associates regarding a dispute about the company's write downs of assets.
The dispute between the company and Alikhani began when he resigned in October, and Berkeley appointed Alex Borelli as its new chairman. In November, Berkeley said "certain material concerns have come to light as to the classification and valuation of approximately GBP4.3 million of prepayment for non-current assets as at December 31, 2013."
Alikhani resigned as chairman of the company for health reasons, and on Thursday, Berkeley said a series of medical opinions over recent months has now led to Alikhani being diagnosed with alzheimers.
Doctors have therefore decided he "did not have the capacity or understanding to execute or deal with complex transactions and therefore his wife made an application to court to have an independent person consider the document and sign the settlement agreement on his behalf."
Under the settlement agreement, Berekley has reached a settlement with Alikhani's wife, Barbara Alikhani.
Alikhani has paid Berkeley GBP960,000 in cash under the settlement, while Heathey Ltd, a company in which Alkihani's son is an authorised signatory, has waived a GBP40,000 repayment owed to Heathey by Berkeley, it said.
All the parties involved, including the Alikhani's and associated companies, have waived their rights under options and warrants exercisable over, in aggregate, just under 40 million Berkeley shares, which represents around 2.7% of the issued share capital of the company.
In addition, a further 24.5 million shares held by Alikhani's son, wife and Swan Logistics Ltd, a company associated with the Alikhani's, will also be converted into deferred shares with no economic or voting rights, and will be delisted from trading on AIM, said Berkeley.
All of the parties involved also agreed to release and discharge any claims, demands, set-offs, or rights to complain under any circumstances relating to the the write down of certain of Berkeley assets, it said.
"The directors believe that entering into the settlement agreement represented the most suitable course of action for the company in the current circumstances," said Berkeley.
"Following protracted negotiations with the settlement parties, the directors believe that the terms of the settlement agreement are fair and reasonable and result in the company being credited with GBP1.0 million at a critical point for working capital sufficiency, resulting in a current cash balance of approximately GBP1.2 million," it added.
Berkeley said it will use the settlement funds to progress its plans for implementing the processing of its tailings assets in Zambia.
Following receipt of the settlement funds, the company said it will finalise as soon as possible its accounts for the year ended June 30, 2014, which will include further information on the write down of assets. A spokesman said the company "can't go into detail about the settlement agreement itself," when asked by Alliance News.
Berekley shares, which are currently suspended, are expected to return to trading once the company publishes its 2013 financial year accounts, it said. The dispute over write downs concerns the 2013 financial year.
On February 2, the company said it will record between GBP10 million to GBP12 million in write downs of assets for the 2014 financial year.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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