US grocery retailer Kroger has said it will pay US$110m to Dynergy to settle litigation over four electrical power supply contracts the two companies had.

Kroger said two of the four contracts would be terminated and the other two, through which Dynergy indirectly supplies electricity to Kroger subsidiary stores in California, would be restructured, reported Reuters.

As a result of the settlement Kroger said it expects to record an after-tax charge of around $41m, or 5 cents a share, in the second quarter of 2003. Kroger said it expects earnings per diluted share to increase by around 1 cent in 2003 and around 2 cents in 2004 as a result of being able to buy cheaper electricity following the settlement.