29 Jun 2012

GPG share price slips in wake of huge fine

7:28 am on 29 June 2012

Shares in Guinness Peat Group have slipped after the firm announced its threadmaking subsidiary, Coats, will have to pay a €110 million fine for its part in a price-fixing cartel.

Shares in Guinness Peat Group fell half a cent (1.10%) to 45 cents on Thursday.

Cartel activity in zips and fasteners took place between 1977 and the late 1990s - before GPG took ownership of Coats.

The European General Court has dismissed Coats' appeal of a European Commission decision from 2007, and ordered it to pay the fine.

An extra €28 million in interest costs have been accrued since the initial decision.

Coats says it is extremely disappointed with the court's decision and it is considering whether there are grounds for further appeal to the European Court of Justice.

Coats says it has a provision of €45 million for the fine, leaving an extra €93 million to be accounted for in the six months to the end of June.

The company says it refinanced its debt facilities in October and it has adequate banking facilities to allow it to pay the fine.