ASX-listed outdoor advertising and signage company QMS (ASX:QMS) and its subsidiary Q Media has defended some media speculation in relation to a lawsuit claim that it has been involved in.
QMS Media released a statement on the ASX saying that it is “not aware of any facts or materials” which support a claim by a recent AFR article which capped the value of damages in the alleged lawsuit it’s involved in at $200 million and said the cooperation agreement was not legally binding.
QMS is currently facing a lawsuit by outdoor advertising company, the Manboom Group, which also includes its subsidiaries Manboom Signage Partnership and Miller Street Partners, over revenue lost as a result of an alleged cooperation agreement breech.
“This dispute has been running for some time and has been the subject of court proceedings originally filed by the Manboom Group in the NSW Supreme Court in June 2018 and the subject of a cross-claim by QMS filed in August 2018,” the statement on the ASX read.
“The dispute has been noted in QMS’ annual report and accounts, as published on 18 April 2019 and its half year report and accounts published 23 August 2019, in the notes to accounts regarding contingent liabilities.”
But it added that the claim by the Manboom Group is denied by QMS and is being defended.
“At no time in the proceedings to date has the Manboom Group set out the quantum of any claim for damages and QMS is not aware of any facts or materials which support the quantum of the damages referred to in the AFR article,” it said.
“QMS is not aware of any further information since the publication of its half year report and accounts which would cause it to change its view on the merits of the claim or the potential liability which QMS may have in respect to the claim.”
The AFR report read, “if the court rules the agreement is legally binding, then Manboom breached the agreement via its upgrade of Sydney’s M2 Motorway from static to digital signs.
“Court documents for Manboom state the cooperation agreement refers to NSW, or development opportunities where 50 per cent of the revenue is expected to come from NSW. Manboom alleges QMS has developed a number of sign projects in NSW on its own without coming to Manboom…
“Sources said an internal assessment of different outdoor advertising sites by Manboom alleged it had missed out on between $150 million and $200 million from QMS under the agreement.”
A hearing addressing the issue is expected to happen at the NSW Supreme Court on December 13.
At the time of writing, QMS’ shares were trading at $1.19.
QMS Media also most recently entered into a Scheme Implementation Deed (SID) with an entity controlled by Quadrant Private Equity and its institutional partners (together, Quadrant), under which Quadrant acquires 100 per cent of QMS Media’s shares.
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