The outstanding issues between Caterpillar Inc and Mining Machinery Ltd of China have been settled. This announcement comes after Caterpillar sought to acquire mining equipment firm ERA and its Siwei unit.
The settlement was concluded when a reduction of the purchase price was agreed upon. The announcement said that Caterpillar's payment obligations to Mining Machinery would be at US$29.5 million from the initial US$135 million.
Prior to this, Caterpillar had called out Mining Machinery and Siwei for 'deliberate, multi-year, coordinated accounting misconduct.' It has undertaken a due diligence review and found the discrepancies in its accounting and balance sheets.
Caterpillar is the world's biggest manufacturer of construction equipment, It had purchased ERA for US$653.4 million or HK$5.06 billion from Mining Machinery in June 2012. Included in th esale is Siwei, the fourth biggest manufacturer of hydraulic roof supports.
According to Steve Wunning, Caterpillar's group president for resource industries, "We are pleased to resolve these issues with the MML parties, which, as we move forward, will position Caterpillar to put greater focus on improving the Siwei operation."
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