KUALA LUMPUR :  LCL Corp Bhd will receive a refund of 5.44 million dirham (RM5.25 million) from Arabtec Construction LLC following the resolution of a payment dispute over the Tiara United  Tower in Dubai.

LCL, a Malaysian interior fit-out, told Bursa Malaysia on June 23 that both parties had resolved the final account for the project.

Under the resolution, LCL would receive the RM5.25 million from Arabtec, the main contractor for Tiara United Tower , and thereby cease the civil suit against Arabtec.

Arabtec had made a partial claim on the advanced payment received by LCL unit LCL Interiors Contracting LLC (LCLIC). This was after changes in the tower project, resulting in the omission of LCL's portion for the interior fit-out (IFO) portion.

To recap, in January 2008, LCL had secured the IFO project at the Tiara United Tower for 156 million dirhams.

LCL obtained an initial advance payment of 39 million dirhams or 25% or of the project  value.  The 39 million dirhams was secured against an advance payment bond (APB) provided by LCL to Arabtec.

On the financial effects on the settlement, LCL said there was an estimated revised net cash flow impact of about 19.95 million dirhams to the group as compared to 25.4 million dirhams previously reported;

There was also a decrease of net gearing ratio to 2.89 times as compared to 2.92 times previously reported. There was also a profit recognition of 3.30 million dirhams instead of loss recognition of 3.09 million dirhams previously reported.