LONDON (Alliance News) – Pebble Beach Systems Group PLC on Friday said it has received USD250,000 from xG Technology Inc, representing the first payment after the pair reached a settlement over the disputed sale of the London-listed company’s hardware division.
The USD250,000 forms part of the total USD2.0 million that was owed to Pebble Beach’s hardware division prior to being sold to xG, as xG is pursuing the debtor on behalf of Pebble Beach to recover the funds owed. Pebble Beach said it intends to use the proceeds to pay down its debt.
Pebble Beach, formerly known as Vislink, sold off its hardware division to xG for USD16.0 million in December 2016 and, as of March, xG had USD4.9 million left to pay in deferred consideration.
However, xG then argued that any future payments to Pebble Beach would be based on the future performance of the division, which was news to Pebble Beach as it claimed it was unaware of any dispute with xG.
That prompted discussions between the pair and, shortly afterwards, Pebble Beach conceded and agreed to settle for a total payment of USD2.0 million, plus the release of USD125,000 that was in escrow, meaning it will received less than half what it thought it was owed.
That sum is separate from, and additional to, the USD2.0 million owed to the hardware division from debtors.
Pebble Beach did benefit, however, as the settlement allowed it to remove some provisions from its books. The agreement means no further liabilities are owed, except from a three-year lease obligation in Hemel Hempstead, which remains Pebble Beach’s liability under the original agreement.
At the time of the settlement, Pebble Beach said the USD2.0 million it was still owed from debtors of its hardware division would be collected by itself and xG by the end of September 2017.
Pebble Beach shares were up 7.0% on Friday at 5.19 pence.
By Joshua Warner; email@example.com; @JoshAlliance
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