Finland's Lemminkainen to pay $46 million for asphalt price fixing
By Jussi Rosendahl
HELSINKI (Reuters) - Finnish construction firm Lemminkainen (HEX:LEM1S) must pay damages of up to 34 million euros ($46 million) plus interest to local authorities in the country for fixing asphalt prices with competitors, a Helsinki district court ruled on Thursday.
The company had faced claims for as much as 129 million euros but the court dismissed demands made by the Finnish state while allowing the claims from the municipal authorities, saying the state itself had been involved in the nationwide cartel that operated in the period 1994-2002.
Lemminkainen said it would record the cost of the damages in its fourth-quarter results and warned that, as a result, 2013 results would be "clearly negative".
However, shares in the company rose 4.1 percent to 15.04 euros as investors were relieved over the amount of claims.
"Had all the demands passed the court it would have been bad for the company. I don't believe they will complain on this decision, they probably want to get the whole case out of the way for good," said Sauli Vilen, analyst at Inderes equity research.
"One can also assume that even if other parties complained over this, the damages won't increase very much by new court rounds."
The company, 10-percent owned by Sweden's Peab (STO:PEAB B), has been cutting costs after operational problems and weak construction markets hit profits in recent years.
"We were ... prepared also for this outcome. We have sufficient financing arrangements and liquid funds that will cover these damages," said Timo Kohtamaki, Lemminkainen's chief executive in a statement.
In 2009 the country's supreme administrative court ordered Lemminkainen to pay a penalty of 68 million euros for being the leader of the nationwide price-fixing. Six other companies were also fined, including NCC Roads (STO:NCC B) and Skanska Asfaltti (STO:SKA B). These companies were told by the district court on Thursday to pay further damages totalling about 3 million euros between them.
($1 = 0.7367 euros)
(Reporting By Jussi Rosendahl; Editing by Greg Mahlich)
