The European General Court has dismissed Coats' appeal on all counts and has upheld a 110 million euro ($174m) fine imposed by the European Commission in 2007 for price-fixing, Coats' owner, New Zealand investment company Guinness Peat Group said.
All up, the decision is going to cost Coats - a major player in the global industrial yarns, threads and textile consumer crafts markets - 138 million euro ($217m).
"Coats is extremely disappointed with the Court's decision and its legal counsel are considering whether there are any grounds for further appeal to the European Court of Justice," Coats said in a statement.
"Coats maintains that the European Commission's allegations of a market sharing agreement in the European haberdashery market in the period from 1977 to 1998 are unfounded," Coats said.
Including 28 million euro of interest accrued from the date of the original European Commission decision, the cost of this decision to Coats will be 138 million, the company said.
It has maintained a provision of 45 million euro against the possible cost of this fine, leaving an additional 93 million to be provided and accounted for in Coats half year figures to June 30 2012.
Coats said 65 million euro will be treated as an exceptional item within operating profit and 28 million will be treated as an exceptional interest cost.
Coats refinanced its senior debt facilities in October 2011, making an allowance for the possibility of an unfavourable judgment.
The company said it had "more than adequate" banking facilities to allow it to pay the fine.
In September 2007 the European Commission concluded its investigation into European fasteners.
It imposed fines against several producers, including a fine against the Coats 110.3 million euro in respect of the Commission's allegation of a market sharing agreement in the European haberdashery market.
Coats rejected the allegation and contested the Commission's decision.
John Hawkins, chairman of the New Zealand Shareholders Association, said yesterday that it seemed unlikely the decision would be overturned.
GPG's shares last traded on the NZX 45.5c.
- APNZBy Jamie Gray Email Jamie