VPS terminates agreement of developing a new funds system
Verdipapirsentralen ASA (VPS) has been involved since spring 2008 with the development of a new mutual funds system, with the objective of renewing the services it offers for fund management companies and their distributors. The Board of Directors of VPS has now decided to repudiate the contractual relationship with the supplier Capgemini and halt this project.
Work on developing the system has taken longer than both VPS and its supplier, Capgemini, had originally envisaged, and the project has been subject to several renegotiations as well as increased budget limits.
It recently became apparent that Capgemini and VPS have materially different views on the question of responsibility for system and integration testing, while at the same time the parties are in agreement that this type of testing would need to be carried out before the system could be put into production. It has not proved possible to reach agreement on this crucial issue, and the parties have also failed to reach agreement on how this disagreement should be resolved. The Board of Directors of VPS is of the view that in this situation it would be imprudent to continue with the project, and has decided to repudiate the contractual relationship and halt the project with immediate effect.
VPS considers it important to make alternative arrangements in order to ensure that customers continue to select VPS as their supplier. VPS will therefore continue to work on developing systems and services intended for fund management companies. Its future development in this area will take place in collaboration with its customers, with the objective of ensuring that fund management companies will continue in the future to recognize VPS as a supplier of reliable and efficient solutions with competitive pricing.
Following the repudiation of the contract, the parties must carry out financial settlement, and VPS is of the view that VPS is entitled to repayment and compensation.
The project has incurred costs in the order of NOK 75 million. Of these costs, approximately NOK 56 million had been capitalised as at 31 December 2009. The accounting implications for VPS and Oslo Børs VPS Holding ASA respectively will be evaluated in connection with the preparation of the interim accounts for the fourth quarter of 2009, which are due to be published in mid-February 2010.
Any requests for further information may be addressed to:
Ole-Wilhem Meyer, Chief Executive Officer, VPS. Tel: +47 908 45523
Tom Kolvig, Head of Legal Affairs, VPS. Tel: +47 911 15441
Geir Heggem, Head of IR, Oslo Børs VPS group. Tel: +47 952 38811