(Yicai Global) July 31 -- Beijing New Building Material Group, one of China's largest construction material producers, has agreed to pay USD248 million to plaintiffs of the US gypsum board, settling a dispute over alleged defective gypsum wallboard that has dragged on for 10 years. The company's shares rose.
A number of US homeowners, developers and others have filed lawsuits against dozens of Chinese plasterboard makers including BNBM since 2009, seeking compensation. The bill submitted by plaintiffs to a US court claimed housing maintenance costs from BNBM and its subsidiaries amounting to around USD350 million.
The Beijing-based company will make payment through its Taisan Gypsum unit, it said last night. In return, the plaintiffs have agreed to drop all claims and allegations against BNBM and its affiliates. The settlement must be approved first by the US court before it can take effect, the firm added.
BNBM's shares [SHE:000786] rose 2.5 percent to end the day at CNY17.98 (USD2.61) each. The benchmark Shenzhen Component Index fell 0.8 percent.
The USD248 million settlement will make a big dent in BNBM's first-half profit, but it will greatly reduce the firm's litigation costs, which have been ongoing for many years, and help it make savings on human and material resources.
Last year, BNBM's net profit rose 5.2 percent to CNY2.4 billion (USD348.6 million) from a year earlier on an almost 13 percent jump in revenue to CNY12.5 billion.