Settlement of SOCIÉTÉ GÉNÉRALE Litigation
ASX Code: HBSHA
Heritage Building Society Limited (Heritage) advises that it has reached a settlement of the legal proceedings brought against Heritage by Société Générale Australia Branch (SG).
SG has provided a securitisation warehouse for Heritage, HBS Trust No. 1. Following SG’s decision to withdraw from securitisation in Australia, certain demands were made of Heritage by SG and legal action was subsequently commenced on 19 August 2008 with Heritage being served with proceedings issued in the NSW Supreme Court by SG. Amongst the initial claims, which were subsequently amended, were claims for an increased margin to be payable to SG for the 2008 and 2009 financial years and a refinancing of the facility. Heritage denied the claims and defended the proceedings.
While the details of the settlement are confidential, the settlement involves the restructure and repricing of funding to HBS Trust No. 1 and SG discontinuing the proceedings.
While the ongoing funding costs of HBS Trust No. 1 will increase from December 2009, Heritage expects that its profit after tax for the 2009/10 year will exceed that of 2008/09, which was $25.5 million.