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N Brown Group PLC on Monday agreed to pay Allianz Insurance PLC £29.5 million, bring their three year legal dispute to a close.
Shares in the Manchester-based clothing and footwear retailer were up 6.9% to 27.15 pence each in London on Monday afternoon.
The settlement relates to a claim issued against N Brown subsidiary JD Williams & Co Ltd by insurance giant Allianz regarding the sale of historical insurance products.
The claim was first issued back in January 2020.
Under the settlement, which will bring the legal dispute to an end, JD Williams will pay the insurer £49.5 million. N Brown expects the payment to be made by the end of January.
In August, a provision of £25.2 million in respect of the claims was recognised in N Brown’s balance sheet.
‘The settlement removes a significant element of uncertainty and distraction for JDW and allows the company to focus on creating shareholder value through its core business activities as it continues its transformation,’ N Brown said.
It added that it has sufficient liquidity to meet the cash flow requirements of the settlement, including net cash of £82.9 million as at December 31, as well as a £100 million revolving credit faciility and £12.5 million overdraft.
‘After satisfying the settlement the company will retain a strong unsecured net cash position with material additional liquidity facilities remaining undrawn,’ the company added.
N Brown will release its third quarter trading and outlook update on Thursday.
By Sophie Rose, Alliance News reporter
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