KBR announced that JKC Australia LNG Pty Ltd ("JKC") joint venture, in which KBR has a 30% ownership interest, and Kellogg Brown & Root Pty Ltd have entered into a conditional settlement agreement (the "Settlement Agreement") to resolve outstanding claims and disputes between JKC and its power plant subcontractor, the consortium comprising: (i) the unincorporated joint venture between CH2M Hill Australia Pty Limited and UGL Infrastructure Pty Limited, (ii) General Electric Company, and (iii) General Electric International, Inc. (the "Consortium").
"We are pleased to announce the resolution of this dispute between JKC and the Consortium. This resolution removes significant uncertainty, distraction and legal costs," said Stuart Bradie, KBR President and CEO.
As a result of the Settlement Agreement, KBR expects to receive approximately $271 million of cash in two payments: $203 million in April 2022 and $68 million in March 2023, at prevailing exchange rates. KBR expects to report a non-cash loss of approximately $140M in its 1st quarter 2022 results for the period ended March 31, 2022. Additional details will be provided in connection with our 1st quarter 2022 earnings report.
The Settlement Agreement remains conditional and the outstanding arbitration between JKC and the Consortium is proceeding until the conditions are satisfied. If any member of the Consortium fails to take the actions necessary to satisfy the conditions to the Settlement Agreement, the Settlement Agreement will become void.
Should the conditions of the Settlement Agreement be satisfied, the parties agree to withdraw all claims and terminate the ongoing arbitration between the parties.
