Caterpillar Inc., the world's largest maker of construction and mining equipment, had its obligations cut by $135 million as part of a settlement reached relating to its purchase of ERA Mining Machinery Ltd.
The company resolved all outstanding issues with Mining Machinery Ltd. arising from the purchase of ERA, Peoria, -based Caterpillar said in a statement. Caterpillar's outstanding obligations to the MML parties were cut to $29.5 million, from $164.5 million, as part of the resolution, it said.
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Caterpillar said Jan. 18 it would take a $580 million writedown after discovering accounting "misconduct" at a Chinese unit acquired last year. The company bought ERA for HK$6.15 billion ($792 million) and the discrepancy was uncovered at ERA's Zhengzhou Siwei Mechanical & Electrical Manufacturing Co. unit, which manufactures coal-mining equipment.
The settlement agreement was reached with former ERA directors Emory Williams and John Lee, Mining Machinery and James Thompson III, Caterpillar said.