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Toll rejects Patrick claim of $510m dispute over PN

<p>Toll says that Patrick has gone public with a dispute over freight contracts between Toll and Pacific National only as a tactic in its takeover defence. </p> <p>Patrick claimed last week that freight agreements between Toll North and Pacific National Queensland had short-changed the two companies’ rail joint venture in favour of Toll by up to $510m over 20 years. </p> <p>Patrick said the dispute over the 2003 contracts had been underway since last year, with investigations by both PN and Patrick over cost and capital spending underestimates in the contract which have favoured the price paid by Toll. </p> <p>Patrick triggered the deadlock resolution procedures in the joint venture agreement yesterday (Monday, September 5) possibly resulting in the break-up and sale of PN assets among the two partners if they cannot agree. </p> <p>However, Toll said the dispute was worth less than $20m in net present value terms and questioned Patrick’s use of the deadlock procedures. </p> <p>These procedures, "relate to matters that are material to the financial condition, assets, liabilities, or prospects of Pacific National". </p> <p>"Given that the amount of the dispute is immaterial, these conditions would never be satisfied," it said. </p> <p>Toll also said senior Patrick executives were involved in the drafting of the agreements right up until the signing, that discussions were still going on, and that Patrick had proposed that Patrick board nominees at Pacific National be given sole arbitration of the issue. </p> <br />