So we are told that the terms of the settlement are "confidential". OK. However: The HUO announcement on this adds some doubt about the degree of confidentiality, does it not? HUO says they will receive $4.5m "compensation". RIC say they will take a charge amounting to the original $1m set aside for doubtful debts/legal costs. No mention of a $4.5m payment to HUO in the RIC announcement.
So this is all very murky and unnecessarily so because it gives a bad signal to shareholders. If it was indeed a "mutually beneficial " agreement then why not tell shareholders everything? After all, both supposedly benefit! That we are not given clarity makes one suspect that one or other is a bigger loser in this deal.
The RIC balance sheet as at the Feb half year report noted $17.5 m debt due from HUO. Presumably that will now be repaid. After that, RIC pays $4.5m "compensation" and incurs costs of $1m. As well RIC seems to have an understanding that HUO will become a customer of its acquafeed once again, sometime soon. Maybe that is the "mutually beneficial" side of the deal for RIC? This is because on the information we have from the announcements on this, i.e. on the face of it given no more information, RIC seems to be getting back (net) only $12m (17.5-5.5) from the settlement.
It should all come out more clearly in the financial wash eventually---let's see what is declared in the financial statements of RIC /HUO in due course.
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