Business
IHC Settles Warranty Claims
IHC Settles Warranty Claims.
About this update from Inspiration Healthcare Group Plc
[{"type":"text","content":"\n RNS Number : 7991R India Hospitality Corp. 06 May 2009 \n \n\n\nIndia Hospitality Corp.\n\nIHC Settles Warranty Claims\n\nLondon - 6 May 2009 - India Hospitality Corp. (LSE: IHC) (the 'Company') today announces the following:\n\nIn July 2007, the Company acquired Mars Restaurants Private Limited and SkyGourmet Private Limited ('Sky') from affiliates of Navis Capital Partners and certain private shareholders (the 'Sellers') pursuant to a share purchase agreement (the 'SPA') that contained certain representations, warranties and covenants given by the Sellers.\n\nOn 24 December 2008, the Company announced that it had initiated a claim for indemnification against the Sellers pursuant to the SPA. Since then the Company has been in discussions with the Sellers, who have made certain counter-claims regarding land owned by the Company in Chennai, India. The disputes have now been resolved and a settlement agreement executed by the Company, the Company's subsidiary IHC Mauritius Corp. ('IHC Mauritius') and the Sellers.\n\nSince completion of the SPA, US$10 million (plus accrued interest) has been held in an escrow account to provide funds to settle claims brought by the Company under the SPA (the 'Escrow Account'). The parties have agreed the following settlement to their claims that result in the Company receiving approximately US$6.6million comprised of a cash payment and a cash loan to IHC Mauritius:\n\n\n\nUS$4,577,590 of the amounts held in the Escrow Account will be paid to IHC Mauritius.\n\n\n\n\n\nSubject to the granting of the security described below, the Sellers shall loan IHC Mauritius US$2,014,297. This loan will accrue interest at a rate of 10 per cent. per annum and will become repayable 12 months after funding.\n\n\n\n\n\nAn outstanding payable due to Gordon House Airport Hotels Private Limited ('Gordon House') (a company owned by the Sellers) from Sky of a principal amount of Indian Rupees 100,000,000 (approximately US$2.02million) will be restated to accrue interest at a rate of 10 per cent. per annum. In addition, IHC Mauritius and the Sellers have entered into an acquisition agreement pursuant to which IHC Mauritius has agreed to acquire Gordon House twelve months from the making of the loan described above for an amoun...