BUILDING MATERIALS group CRH is seeking to take a dispute with its joint-venture partner in a Portuguese business to arbitration, it emerged yesterday.
The Irish group and Portuguese industrial holding company Semapa are partners in cement and concrete manufacturer Secil.
Semapa claims that, as the pair are in disagreement, this triggers a clause in their shareholders’ agreement allowing it to buy CRH’s 45.126 per cent stake in Secil after an agreed valuation process.
However, CRH says the agreement between the two allows disputes to be referred for arbitration to the International Chamber of Commerce in Paris.
The Irish firm said in a statement yesterday it would refer the matter for arbitration to the Paris chamber. “CRH has confidence in the arbitration process and believes that its position will be vindicated,” it added.
Semapa issued a statement on Wednesday night saying it believed circumstances had triggered its right to begin the process that would lead to it valuing CRH’s stake in Secil and ultimately buying it out. CRH’s statement yesterday came in response to its partner’s move.
Both parties have acknowledged that they are in disagreement over strategy for Secil. The current dispute is over the means of settling the disagreement.
CRH bought its stake in Secil and 49 per cent of the voting rights in 2004 for €429 million, which included a share of net debt.
The original deal between the two nominated the Paris chamber as their agreed arbitration body in case of disputes. Using organisations such as this to resolve disputes is normal practice in the type of agreement between the two companies.
Semapa owns 46.97 per cent of Secil, and 7.9 per cent of the company’s equity is held as treasury stock. Semapa has interests ranging across a number of industries and is listed on Portugal’s stock exchange. It is one of the biggest companies in the country.
Secil manufactures cement and ready-mixed concrete in Portugal and has businesses in Tunisia, Lebanon and Angola.
It is understood that the dispute has not affected Secil’s operations on the ground, and that the company performed well in the first half of this year.
CRH has operations in Ireland, Europe and the US and is the biggest company on the Irish Stock Exchange, accounting for about one-third of the total index.
