OZ Minerals (ASX:OZL) has agreed to pay $55.1 million to settle two class action lawsuits on behalf of shareholders.
The copper and gold mining company said it will pay the settlements out of existing cash reserves, and the payments will impact FY11 net profit by the full amount.
The lawsuits, filed on behalf of some shareholders who acquired shares in 2008, alleged that Oz Minerals failed to disclose its true debt position to the market.
In a statement, OZ Minerals chairman Neil Hamilton said settling was a commercial decision. “The settlement of these class actions is in no way an admission of any liability in respect to either of these cases.
“In any litigation there is always the risk of an adverse finding irrespective of the strength of one's legal case,” he said.
Hamilton added that Oz Minerals wants to be able to concentrate on building its business without the distraction of a drawn out court battle.
The defendants were being represented by the firms Maurice Blackburn and Slater & Gordon (ASX:SGH).
Litigation funding firm IMF Australia (ASX:IMF) had been supporting the case, and in a separate announcement disclosed it expects to receive $15 million if the court approves the settlement. Around $12 million of this will be profit.
OZL shares grew 2.94% in Tuesday's trading to $1.405, IMF shares rose 4.32% to $1.680 and SGH shares grew 0.41% to $2.450.