Adsteam agencies hit by $106 million claim
Australia's Adsteam Marine, being courted by A.P. Moller-Maersk's global towage and salvage company SvitzerWijsmuller, late Friday received a notice of claim brought in the Supreme Court of Queensland against two of its agency subsidiaries in Australia and Papua New Guinea.
Peninsula Shipping Lines Pty Ltd., an Australian company which operated a coastal ferry service in Papua New Guinea for three weeks in October before ceasing operations amid reported friction between a range of public and private interests, is claiming $106 million for the loss of future profits, plus unspecified additional damages from Adsteam Agency Pty Ltd. and Adsteam Agency (PNG) Ltd.
Adsteam said the two companies have less than 1 percent of the group net assets.
The Australian Securities and Investment Commission lists Peninsula with paid up capital of just A$2 ($1.56).
'The Adsteam board regards the quantum of the claim as ridiculous,' said Adsteam in a letter to the Australian Stock Exchange, adding, 'The agency subsidiaries deny liability to Peninsula. The proceedings will be vigorously defended.'
'In light of Peninsula's apparent nominal capitalization, an early application for security in respect of Adsteam's anticipated legal defense costs will be made to the court. Pending provision of that security, Adsteam will ask the court to stay the proceeding,' Adsteam said.
SvitzerWijsmuller's A$704 million ($534 million) takeover offer for Adsteam has been held up by investigations by the United Kingdom's Competition Commission.