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SDL Expects Litigation Charge In 2013, Shares Drop - Update

Shares of SDL Plc. (SDL.L) dropped about 11 percent Monday morning, after the information management firm said it expects potential exposure of up to $3 million in Trados litigation. However, the company stated that its performance for the third quarter was broadly in line with management expectations.

SDL noted that it has a minor ongoing litigation with a former Trados shareholder, claiming breaches of fiduciary duty by former Trados directors on the sale of Trados to SDL in 2005. The company estimates the potential exposure to be between $1 million and $3 million, which if required, will be funded as part of the company's operational cash flow in 2013.

The SDL board believes the case to be completely without merit and expects that it will progress to a court hearing in 2013.

In its Interim Management Statement for the period from July 1 to September 30, the company said most of the growth in the quarter predominantly came from language services, whilst technology revenues remained suppressed.

The company is starting to see increased cash inflow in the business as Alterian re-structuring and process unification is completed.

The Alterian business has integrated well into the SDL Group and is performing ahead of expectations in cultural fit, product fit and financial results, it added.

SDL.L is currently trading at 569.73 pence, down 70.27 pence or 10.98 percent, on a volume of 102 thousand shares on the LSE.

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