WORLEYPARSONS CLASS ACTION

If you purchased WorleyParsons Limited shares between 14th August 2013 and 20th November 2013 then you may be eligible for our class action seeking to recover shareholder losses due to alleged misleading information.

It is alleged that WorleyParsons misled shareholders as to forecast earnings for the 2014 financial year.

In August 2013 positive forecasts for the 2014 financial year were announced and confirmed again in October 2013. However by November 2013 WorleyParsons announced a downgrade in Net Profit After Tax projections.

This resulted in WorleyParsons share prices dropping by 26% with the company market cap being slashed by $1.36 billion.

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For further information about the WorleyParsons class action and the funding to be provided by JustKapital Litigation Pty Limited, please call us on +61 2 9216 9898 or email your enquiries to info@acalawyers.com.au


BACKGROUND

ACA Lawyers has commenced a shareholder class action against Worley Parsons Ltd, an ASX listed public company (ASX:WOR), for alleged breaches of its continuous disclosure obligations and possible misleading and deceptive conduct.

WorleyParsons is a global resource services company, specialising in hydrocarbons and delivering projects within the minerals, metals, chemicals and infrastructure industries.

It has major projects on six continents spanning the marine, transport, water, and rail and resource sectors. WorleyParsons’ services cover the full asset spectrum both in size and lifecycle – from the creation of new assets to services that sustain and enhance operating assets.

It is alleged that WorleyParsons failed to inform the market in a timely manner that it would not meet its Net Profit After Tax (NPAT) Projections for the 2014 financial year.

WorleyParsons announced its 2013 underlying NPAT projections on 14 August 2013, and confirmed its positive outlook on 10 October 2013. On 20 November 2013 WorleyParsons downgraded its forecast 2014 underlying NPAT projections. Following this downgrade WorleyParsons’ share price dropped by 26%.


BASIS OF ACTION

In its 2013 annual report, released on 14 August 2013, Worley Parsons announced a FY2013 profit of $322m, a “strong operating cash flow of $444m” and an improved dividend of $0.925. WorleyParsons also made the following “outlook” statement:

“While recognizing the uncertainties in world markets, we expect our geographic and sector diversification to provide a solid foundation to deliver increased earnings in FY2014”

On 10 October 2013 WorleyParsons held a strategy presentation for the investment community, noting ‘improved earnings FY14 across all sectors’, and repeating the above outlook statement.

On 20 November 2013 Worley Parsons issued a release to the ASX announcing a downgraded forecast of underlying NPAT for FY2014, stating:

“On current indications the company now expects to report underlying NPAT for FY2014 in the range of $260 million to $300 million with first half underlying NPAT in the range of $90 million to $110 million.”

The corrective disclosure of 20 November 2013 represented a 7 to 19 percent profit downgrade against the FY2013 result.

The class action alleges that this disclosure resulted in a 26% fall in the WorleyParsons share price, from $21.59 to $16. It slashed the market cap of WorleyParsons by $1.375 billion.

It is alleged that Worley Parsons failed to keep the market fully informed of its true profit position and did not have reasonable grounds to for making the forecasts in August and October 2013.


FAQ
 

1. Who is running the investigation and litigation?

ACA Lawyers Pty Limited (“ACA Lawyers”) is an Australian law firm that focuses on commercial litigation. Further information about ACA Lawyers is available at www.acalawyers.com.au We are currently conducting or investigating a number of other shareholder class actions, including class actions against Iluka Resources Limited and Macmahon Holdings Limited.

ACA Lawyers has been investigating WorleyParsons Limited’s (“WorleyParsons” ) alleged non-disclosure of material price sensitive information and possible misleading and deceptive conduct during the latter part of 2013. The proposed class action alleges that WorleyParsons failed to disclose a downgrade in its earnings forecasts, which resulted in shares in WorleyParsons being overvalued.

When the downgraded earnings forecasts were eventually released on 20 November 2013, the value of the shares dropped by over 25%. It will be alleged that persons who acquired WorleyParsons ordinary shares between 14 August 2013 and 19 November 2013 (“Claim Period”) did so at an inflated price and have suffered a loss.

Information about this class action is also available at www.acaclassactions.com.au

ACA Lawyers has sought and obtained proposed funding from JustKapital Litigation Pty Limited (“JK”) to fund the continuing investigation and any future class action. JK is an Australian based provider of litigation funding solutions.

2. Who can join the litigation?

All persons who acquired WorleyParsons ordinary shares during the Claim Period (“Claimants”) are eligible to join the proposed class action against WorleyParsons.

3. What is my claim worth?

The size of any claim will depend on the number of WorleyParsons shares you acquired during the Claim Period. The damages payable to you in the event the claim is successful will be based on the difference between the price you paid for the shares and the price at which they were sold or an amount being the difference between the price paid for the inflated shares and the price at which they would have been trading at the time they were acquired, had the company disclosed the material information to the market.

As with most shareholder class actions, it is likely that we will ask an expert or experts to provide an opinion about the effect of the undisclosed information regarding the earnings forecasts on the daily share price of WorleyParsons. The amount of compensation claimed by class members under the share price inflation method of determining loss is usually calculated by reference to this type of expert evidence.

4. What will the claim cost?

The costs of investigation and legal proceedings will be funded by JK (subject to executing formal funding agreements and the litigation budget agreed between JK and ACA Lawyers). You will only pay legal costs if the claim is successful, and then only from any proceeds recovered from WorleyParsons. You will otherwise not have to pay any legal costs, and you will never have to pay anything out-of-pocket.

JK will be entitled to reimbursement of the expenses it has paid and a commission, both of which will only be paid from proceeds if the matter is successful, based on the amount you recover.

5. I only held a small number of WorleyParsons shares. Is it worthwhile joining the class action?

Even though your losses may be relatively small, it may still be worthwhile joining the class action. You will not be required to pay anything in the event of an unsuccessful outcome, subject to the terms of Harbour’s funding agreement. Secondly, the costs payable to Harbour and ACA Lawyers are only deducted from proceeds that may be recovered either by way of settlement or judgment. Your share of these costs is generally proportionate to the amount of your losses.

6. Will I ever have to pay anything ‘out of pocket’?

You will not be required to pay any out of pocket costs, and you will not have to pay any legal fees if the litigation is unsuccessful.

If you choose to sign JK’s funding agreement and become a group member in the class action, at law you cannot be held liable for any adverse costs orders or security for costs orders made in favour of any defendants.

If the class action is successful, our legal fees and JK’s costs and commission will only be paid from the proceeds of that class action. In the unlikely event that legal costs exceed the proceeds recovered from WorleyParsons, your legal costs will be capped at the amount of any proceeds.

7. What will ACA Lawyers and JK receive?

A proportion of ACA Lawyers’ legal costs will be paid by JK in accordance with the Retainer and Terms of Engagement.

If the proceedings are successful or are settled, JK and ACA Lawyers will be repaid the costs that they have incurred. If the claim is settled after proceedings are commenced the Court must approve the legal costs to be paid as part of the settlement.

If the proceedings are determined by the Court in favour of the applicant the respondent will be ordered to pay the applicant’s costs. If the amount of those costs cannot be agreed the Court will determine those costs. If there is a gap between the costs JK has paid and the amount it recovers then JK will be paid this amount from the total recoveries.

JK will receive a commission based on a percentage of the amount recovered on the basis set out in the terms of JK’s funding agreement.

8. How long will any legal proceedings take?

The class action is likely to take anywhere between one and three years. A number of factors can influence the length of time proceedings may take including the complexity of the litigation and the conduct of the respondent.

9. Will my personal information and shareholding details be confidential?

Your personal information will only be used for the purpose of the legal proceedings, or as required by the Court or by law. In any other circumstances, we will seek your consent before disclosing any of your personal information. We will not disclose any personal information to third parties, including other clients, except as may be necessary for the purposes of the legal proceedings. A more detailed privacy statement can be found in the terms of our retainer.

10. How much time will I have to spend on the legal proceedings?

Initially we will only require you to provide the information required to complete JK’s Funding Agreement and our Retainer. This information relates to your contact details and WorleyParsons shareholdings in the period from 14 August 2013 to 19 November 2013. In the event that we require any further information, this will be advised in writing.

11. What do I have to do to participate?

If you acquired WorleyParsons shares in the Claim Period and wish to retain ACA Lawyers and have the legal costs of the class action funded by JK, you will need to sign and return our retainer and JK’s funding agreement. If you do not already have these documents, please email us at info@acalawyers.com.au

So if you wish to participate, please complete and sign both our retainer and the JK funding agreement and return them to us via email at info@acalawyers.com.au

If you have any questions about the class action, please contact ACA Lawyers by telephone on (02) 9216 9898 or by email at info@acalawyers.com.au