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Birse shells out £2m in data centre row

Birse has agreed to pay Citibank £2 million in an out of court settlement over the termination of a contract to build a £21 million data centre in Lewisham, south east London.
The financial hit will be in addition to a £2.3 million sum it has already paid the banking giant and another £2 million for its own costs.

In November 2003, Citibank began adjudication proceedings against Birse claiming £16 million in damages while Birse counter-claimed for £14 million.

The agreement draws a line under the uncertainty which comes with a major legal row, the company said.

Birse will pay Citibank in 14 quarterly instalments and charge the figure to its profit and loss account as an exceptional item in the current financial year. It has also been granted the option to pay up to £720,000 of the liability by issuing ordinary shares in the company.

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