Utility giant Tenaga Nasional Bhd and investment bank UBS Warburg have reached an out-of-court settlement over a dispute related to a 10-year, 500-million-dollar Yankee bond issue, a report said today.

"The terms of the settlement are confidential and neither party will make any further comment," The Star newspaper cited a statement released by Tenaga's lawyers in London as saying.

Awang Adek Hussin, Tenaga chairman said that with the settlelment, the power company could now focus on its normal operations.

The most important thing was that both parties were happy with the settlement, he said, declining to reveal any details.

"The details cannot be made public as it is feared that (they) will be manipulated by certain groups to advance their own interests," he was quoted as saying by Bernama news agency. Awang did not elaborate.

The trial started in London on Monday and Tenaga and UBS sought the court's permission on Wednesday for a stay of proceedings in an attempt to settle the dispute.

Counterclaim

Tenaga said the dispute with UBS was resolved "to their mutual satisfaction and, as a result, the High Court proceedings have been concluded".

The dispute emerged last year when UBS sued Tenaga for US$86.94 million for unilaterally terminating two options relating to the Yankee bond issue in 1997 conducted by Union Bank of Switzerland, the predecessor of UBS Warburg.

Tenaga said it was not liable and filed a counterclaim alleging UBS negligently advised and misrepresented the facts both at the time when the deals were entered into and in the period leading to the termination of the transactions by Tenaga. - AFP