Perth-based Tap Oil has settled its outstanding disputes with its second-largest shareholder, days before the matters were to hit the courts in Singapore.
Tap will make a $US2 million cash-and-scrip payment to Northern Gulf Petroleum, which is controlled by Thai entrepreneur Chatchai Yenbamroong, ending all existing and future obligations owed by Tap.
The payment will end all existing and future obligations Tap would owe by way of earn-out payments to Northern Gulf.
The settlement follows news in May that Tap expected to resolve its outstanding disputes with the dissident shareholder after following through on a planned major restructure under which Doug Bailey will retire as chairman and three new directors will join the board, including a Northern Gulf representative.
In a statement, Tap said it and Northern Gulf had agreed to settle the disputed payments for a zero settlement sum.
“Both parties have agreed to bear their own legal costs and to discontinue the arbitration and any further legal action on this matter,” Tap said.
A hearing was due to commence in Singapore next Monday.
Tap chief executive Troy Hayden said the board felt the ongoing relationship with Northern Gulf could be damaged by the arbitration result.
“The outgoing chairman, Doug Bailey, has successfully negotiated a settlement with Mr Yenbamroong and additionally remove the future earn-out payments for a discounted amount,” he said.
“The settlement of the dispute and the cancellation of the ongoing earn-out remove any potential future conflicts over these payments.
“We were able to achieve this outcome by working cooperatively with Northern Gulf who have also been keen to move forward constructively with Tap.”
Tap shares were 2.4 per cent higher to 8.4 cents each ahead of the close of trade.
