Sigma settlement approved
December 19, 2012
THE Federal Court has today
approved the proposed settlement
of the long-running class action
brought against Sigma
Pharmaceuticals (PD 24 Oct), which
will see the company make a $57.5
million payout without admission
of any liability.
The case related to claims that
the company did not disclose
material information to the stock
market when it was raising capital,
prior to a shock downgrade in the
value of its generics business.
According to an update issued
this morning, settlement of the
action was conditional upon
approval by the Federal Court of
Australia, and now that this has
gone through payment is expected
to be made within a week.
“As a result of the Federal Court
approval, the settlement payment
will now be distributed to class
members by Slater & Gordon,”
Sigma said, with the matter then to
come back before the court for
Final Orders, including that the
class action be dismissed.
Sigma said the settlement
payment will be reported as a
“material non-recurring item” in its
2012/13 full year results.
MEANWHILE Sigma has also
issued a trading update, saying that
business in the second half of the
year has “continued to be in line
with expectations”.
Sales have been slightly stronger,
which is expected to flow through
to gross profit, however consistent
with the first half result “logistic
costs have been higher than
expected”.
Sigma also disclosed a recent
refrigeration failure at its Newcastle
Distribution Centre, which will
result in an unbudgeted expense of
around $3 million.
The company said that cash at the
end of the financial year will be
lower, reflecting the payment of
the $57.5 million class action
settlement as well as its ongoing
share buyback program, dividend
payments “and some incremental
investment in inventory levels to
improve customer service levels”.
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