Saturday, November 10, 2007 12:17:30 PM
ABX warns of credit default on DHL payment dispute
Friday November 9, 12:17 pm ET
(Reuters) - Air cargo services provider ABX Air Inc (NasdaqGM:ABXA - News) on Friday warned of a credit default as it seeks to resolve a dispute with a major customer regarding reimbursement of fuel expenses and other costs, sending its shares to a three-and-a-half-year low.
The company claimed that DHL had withheld certain payments under two commercial agreements.
ABX, which is DHL's principal business partner in the U.S., provides them with air cargo transportation services under their aircraft, crew, maintenance and insurance (ACMI) agreement.
It also provides staff for package sorting, warehousing, logistics and equipment maintenance services under their Hub services agreement.
The dispute relates to reimbursement of fuel expenses withheld by DHL as ABX's revenue from other customers exceeded a 10 percent threshold, the company said in a statement.
However, ABX contends that DHL has improperly excluded certain fuel expenses reimbursements incurred on its behalf.
DHL also claims that ABX's costs in maintaining its public company status and certain professional fees incurred by the company due to an unsolicited bid by its competitor are not recoverable under the agreements, ABX added.
In June, Astar Air Cargo had made an unsolicited bid to buy ABX for $7.75 per share in cash. However, Astar later withdrew the offer as ABX had decided not to proceed with the deal.
ABX said it is now reviewing its options while continuing to maintain full service to DHL.
Shares of the Wilmington, Ohio-based lost more than a third of their value, and were trading down $2.o4 at $3.69 in afternoon trade on the Nasdaq.
FEATURED BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • Jul 2, 2024 7:19 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM
VAYK Exited Caribbean Investments for $320,000 Profit • VAYK • Jun 27, 2024 9:00 AM
North Bay Resources Announces Successful Flotation Cell Test at Bishop Gold Mill, Inyo County, California • NBRI • Jun 27, 2024 9:00 AM