Consulting and IT services company Oakton (ASX:OKN) has been hit for close to $20 million in damages following the break-down of arbitration between the company and Tenix Solutions IMES.
In an ASX statement, Oakton said that following a series of issues with a project involving the company and Tenix, Tenix had served on Oakton’s contracting subsidiary a notice “purporting to terminate the relevant contract and a claim for damages estimated $19,364,900.”
Oakton said Tenix’s notice was preceded by the referral to arbitration by Oakton of several disputes arising from the contract and had referred the notice to its lawyers.
The news follows the release of Oakton’s financial results for the half year ended 31 December 2009 in which the company reported an EBITDA of $16.5m – up 47 per cent on the prior corresponding period, and an NPAT of $10.2m up 58 per cent over the same period.
Revenue, however, decreased 4.9 per cent to $93.3m over the same period.
The company said key deals for the period included program management for a new health administration system for a major federal department, and SAP ERP implantation of a NSW property management company and a customer management system integration for a NSW utility.