LONDON (ShareCast) - (Sharecast News) - Frasers has settled a €674m (?588m) dispute with the Belgian tax authorities to remove uncertainty over its finances during the Covid-19 crisis.
The FTSE 250 company said it had paid no material amounts to draw a line under the matter. The potential liability emerged in July 2019 in a chaotic set of financial results and led to a split with Sports Direct's then auditor.

Frasers' statement suggested it settled the matter partly because it had not yet been accepted for the Bank of England's covid corporate financing facility, which supports businesses by buying their short-term debt during the crisis.

Mike Ashley's company said it had decided to settle the dispute because uncertainty was affecting its banking arrangements and its suppliers' credit insurance. With stores closed during the Covid-19 crisis most new credit insurance cover has been withdrawn, it said.

"Frasers Group would also note that it has currently not been accepted as eligible for the covid corporate financing facility," the company added. The BoE scheme for buying commercial paper is aimed at large, financially healthy companies.

The company said: "For the avoidance of doubt, the €674m of disputed VAT including penalties within the 'proces verbal' has been fully and finally settled for an immaterial amount."

Frasers changed its name from Sports Direct in December as it tried to improve its image and move upmarket. Frasers said in January it was "less than probable" that it would have to pay material VAT or penalties to settle the dispute.

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