1 Nov 2010 16:16
1 November 2010
Eco City Vehicles plc
("ECV" or "the Group")
Update Re Cabvision
Further to the announcement of 11 March 2010 ("March Announcement"), the Group provides a general update on litigation relating to Cabvision (Cabvision litigation). As per the March Announcement, ECV, KPM-UK Taxis PLC and KPM Autos Limited (Group Companies) are not parties to the Cabvision litigation, though permission was granted by the Judge on 1 March 2010 for the successful defendants to apply to join the Group Companies for the sole purpose of the cost proceedings.
Cabvision has been informed that the successful defendants' assessment of legal costs owed to them amounts to £3.1m plus interest, having taken into account payments already made by Mr Peter DaCosta. This figure has yet to be subject to challenge or assessment by the Court, which Cabvision has been advised may reduce the figure.
The March Announcement refers to a standstill agreement being agreed in principle by which the successful defendants would not pursue cost claims against Peter DaCosta or the Group Companies pursuant to Section 51 until the conclusion of the proposed action against Cabvision's previous lawyers. The standstill agreement continues to be negotiated.
Impact on ECV's Financial Position
ECV's overall financial position in relation to the Cabvision litigation remains unchanged since the March Announcement.
It should be noted that the Executive Directors and majority shareholders of ECV gave an indemnity to ECV at the time of the reverse takeover (and as disclosed in ECV admission document) in October 2007 in relation to any losses incurred if Group companies become a party to the Cabvision litigation and the scope of this indemnity would cover claims made against Group companies under Section 51.
The Board of ECV therefore believes that ECV will not suffer any financial loss as a result of any costs proceedings. There should be no impact to the Group's finances should the negligence claims not be wholly successful, as any residual liability to meet costs would be covered by the indemnity.
For further information please contact:
Eco City Vehicles plc
David Trendle, Finance Director +44 20 7377 2182
Numis Securities Limited
Stuart Skinner (Nominated Adviser) +44 20 7260 1000
David Poutney (Corporate Broker)
Corfin Public Relations
Neil Thapar +44 20 7596 2860