Hitachi Ltd. and Mitsubishi Heavy Industries Ltd. said Wednesday they have settled a dispute over losses from a thermal power generation project in South Africa involving their joint venture.

Hitachi will pay 200 billion yen ($1.8 billion) in the settlement. The Japanese technology conglomerate will also transfer its entire 35 percent stake in the joint venture, Mitsubishi Hitachi Power Systems Ltd, to Mitsubishi Heavy.

Mitsubishi Heavy will wholly own MHPS. It had called on Hitachi to pay about 770 billion yen to cover the losses and asked the Japan Commercial Arbitration Association to mediate the case.

Hitachi said it will book a one-time expense of 378 billion yen for the settlement, and has accordingly downgraded its group net profit forecast for the business year through next March to 170 billion yen from 360 billion yen.

Hitachi received the order for the thermal power generation project in South Africa in 2007, and the joint venture took over upon its launch in 2014. But the venture suffered hefty losses as the construction of a boiler at the power plant was reportedly significantly delayed, due partly to strikes.

==Kyodo

© Kyodo News International, Inc., source Newswire