CSG to appeal verdict in Fuji Xerox case
- 24 November, 2010 18:24
ICT services company CSG Limited (ASX:CSV) has revealed it will appeal a court decision forcing it to offer some of its customers the option to jump ship to Fuji Xerox Australia.
The New South Wales Supreme Court on Tuesday granted Fuji Xerox permission to write to CSG customers in Brisbane and Maroochydore requesting Fuji Xerox take over their accounts. A move will require the consent of the customers.
The court found Fuji Xerox had validly terminated the agreement the companies once shared in these areas, despite CSG's arguments to the contrary.
In a market update, CSG on Wednesday said the decision has the potential to impact net profit by between $3 million and $4 million for FY11.
But these estimates are for a very unlikely worst case scenario, in which every customer in the two areas jumps ship.
The total number of machines in the field affected represent around 10% of CSG's total installed base.
CSG continues to be a Fuji Xerox dealer - and service these products - in Darwin, and has recently signed an agreement extending its relationship with Canon to also cover Brisbane.
CSG is requesting for a stay of the court's orders until it can mount an appeal.
CSV shares fell 11.4% on Tuesday to $1.540, but partly bounced back on Wednesday with an 8.09% gain to $1.470.