REG - Obrascon Huarte Lain - Notice of Termination of a construction contract <Origin Href="QuoteRef">OHL.MC</Origin>

Obrascon Huarte Lain SAAnnouncement

05/05/2016 07:07

RNS Number : 2968X
Obrascon Huarte Lain, S.A.
04 May 2016
London Stock Exchange Madrid 4 May, 2016
Ref.: Notification of Significant Event:
Dear Sirs,
The company, OBRASCON HUARTE LAIN, S.A. (OHL), in compliance with current legislation, hereby reports the following:
Significant Event
In relation to the contract Design & Build Package 5 Mushaireb Station/Education City Station (the "Contract"), the Company reports that today the Consortium of which forms part has today received from Qatar Railways Company ("QR" or the "Client") a Notice of Termination stating tan within a 14 days period the resolution of the Contract will take place due to -according to its understanding- non-compliance by the Consortium of certain contractual obligations.
In relation to the above, the Company hereby reports the following:
 The Contract was awarded on June 20th 2013 to a consortium (Joint Venture) leaded by Samsung C&T Corporation (50%), of which OHL (30%) and Qatar Building Company (20%) formed also part (the "Consortium").
 Even though -prior to the mentioned Notice of Termination- the Consortium had duly presented to the Client a series of Notices of Dispute to, following the mechanisms set out in the Contract, proceed to resolve between parts, either negotiating or through the intervention of an external expert, the existing differences, the response form the Client has been to send this Notice of Termination.
 OHL considers that the reasons given by the Client lack of any legitimate grounds, and consequently intends to activate through the Consortium all the mechanisms set out in the Contract to claim the effective protection of its interests.
 As of December 2015 the orderbook pending to be executed linked to this Contract by OHL Group stood at  247.7 million (a 3,6% of the Construction Total Orderbook).
 According to the current available information, OHL Group does not expect the final outcome of this contingency to cause any material effect on its shareholders equity or financial condition.
Yours faithfully, 
Jos Mara del Cuvillo Pemn
Vice-Secretary of the Board of Directors

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