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ABB - Abb News Story

$34.22 1.0  2.9%

Last Trade - 14/05/21

Sector
Industrials
Size
Large Cap
Market Cap £48.94bn
Enterprise Value £50.20bn
Revenue £19.03bn
Position in Universe 186th / 6846

UPDATE 2-ABB to pay $104 million to settle S.Africa power plant probe

Fri 11th December, 2020 4:45pm
* ABB worked on delayed Kusile mega project
    * Allegedly colluded to win contract
    * Also benefitted from alterations to scope
    * Eskom expects settlement money this month

 (Adds comment from Eskom, SIU, other details)
    By John Revill and Alexander Winning
    ZURICH/JOHANNESBURG, Dec 11 (Reuters) - ABB  ABBN.S  has
agreed to pay 1.56 billion rand ($104 million) to South African
state power utility Eskom to settle an investigation into
improper payments and compliance issues, the two companies said
on Friday.
    ABB was investigated by South Africa's Special Investigating
Unit (SIU) in relation to over-payments for work it carried out
for Eskom at the Kusile power plant, which will be among the
largest coal-fired plants in the world when complete.
    Kusile and sister project Medupi were meant to help end
crippling power cuts in Africa's most industrialised economy but
instead they have been beset by delays and faults that have
hobbled their electricity output and helped swell Eskom's debts
to more than 480 billion rand. urn:newsml:reuters.com:*:nL8N2CT4R1
    "In order to avoid lengthy and protracted litigation, Eskom
and the SIU agreed that the settlement amount is a fair and
reasonable reflection of the damages that Eskom, and by
implication the people of South Africa, suffered as a result of
this unlawful contract," said Andre de Ruyter, Eskom CEO.
    ABB said the majority of the payment had already been
recognised in its financial results over the last 15 months.
There would be an additional impact of $30 million on its
operational earnings before interest, tax and amortisation
during the fourth quarter, while cash flow would be reduced by
$110 million.
    The industrial robots and drives maker, which self-reported
the problems to the U.S. and South African authorities last
year, said it would continue to cooperate with investigators and
authorities in the United States, Germany and Switzerland.
    "ABB intends to expeditiously close all related pending
proceedings globally, the impact of which is currently not
estimable," the company said.
    De Ruyter said Eskom expected proceeds from the ABB
settlement before the end of the month.

 (Reporting by John Revill in Zurich and Alexander Winning in
Johannesburg; editing by Thomas Seythal and Carmel Crimmins)
 ((John.Revill@thomsonreuters.com; +41 58306 7022; Reuters
Messaging: john.revill.thomsonreuters.com@reuters.net))
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