Billabong International said it is subject to a civil claim requesting compensation of $53 million and $100 million for unspecified damages relating to a license dispute in Indonesia.
CV Bali Balance, Billabong’s former Indonesian licensee, is alleging that Billabong’s termination of its licence to distribute products was invalid, Billabong said in a statement.
CV Bali Balance has lodged its claim in the Denpasar District Court in Indonesia.
Billabong said it is “highly unlikely” the claim will have any material adverse affect on its operations outside of Indonesia or on the revenue, profitability or financial condition of the Billabong Group. Billabong also said there is “no evidence” to support the amount of compensation that CV Bali Balance is requesting.
Billabong said it terminated CV Bali Balance’s licence in 2005 based on a right of termination in the agreement.
CV Bali Balance is calling into question the validity of that termination. Billabong has been operating in the country through PT Billabong Indonesia, a wholly owned subsidiary, since the termination of CV Bali Balance’s licence.
Indonesia represented about 0.7% of the group’s global sales in fiscal 2009, according to Billabong.
