The manager of Keppel Infrastructure Trust (KIT) has announced that following the outcomes of the arbitrations between Basslink and the State of Tasmania and Hydro Tasmania which were announced in December 2020, the arbitrator has finalised the legal costs outcomes in relation to the arbitrations.
See: KIT's Basslink to fork out A$38.5 mil in damages; A$31 mil in unpaid fees not recoverable
Basslink is required to pay the State of Tasmania A $7.2 million and interest of A$1.04 million, while for Hydro Tasmania, Basslink will be required to pay legal costs amounting to A$26 million for the two arbitrated disputes between the two parties.
Basslink has advised that it is in discussions with the State and Hydro Tasmania about payment of above moneys as part of its refinancing of its existing debt.
KIT had recognised $76.2 million in provisions for the FY2020 ended December in relation to the arbitrations.
In light of the finalised legal costs, KIT will be making an additional provision of $23.8 million for the FY2021 ending December.
As there is no contractual recourse to KIT and KIT does not rely on Basslink’s cash flows for its distributions, the manager says the provision is not expected to have any financial impact on the distribution per unit of KIT for the FY2021.
Units in KIT closed flat at 56 cents on June 9.
