Shares in Imperial Sugar jumped 18% after the sugar group revealed its insurers had agreed to pay it $345m following the fatal explosion at a US refinery.
The sugar group said it would recognise a pre-tax gain of about $278m following the payout, over which many investors had had doubts following rulings against the Texas-based sugar group.
Imperial was last July fined $8.78m by the US Occupational Safety and Health Administration last July for safety breaches at the Port Wentworth refinery, and a second plant in Louisiana.
A report from a second watchdog, the US Chemical Safety Board, in September blamed management failures at Imperial for allowing the build up of waste sugar which had led to the blast, in which 14 workers died and a further 36 were injured.
The insurance payout is near the policy's maximum of $350m.
In the red
Besides the $220m-230m bill for rebuilding the plant, the policy also provided for "business interruption" costs, an element which will pay $45m.
"We do not believe the Street was pricing in the $45m to occur anytime in within the next six months," analysts at California-based broker BWS Financial said.
"The news of the settlement with the insurance carriers came earlier than expected and should result in an upward move in Imperial Sugar shares."
Lawsuits
However, Imperial Sugar still faces a number of lawsuits from the families of workers killed and injured in the explosion, litigation the company has said it is also adequately insured against.
"The legal battles are a situation that would take some years to play out," said BWS, which has a "buy" rating, and $20 pice target, on Imperial shares.
"The financials will not be damaged during the process, but IPSU shares could be highly volatile because of the rulings from the trials."
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