Melrose Industries saw a notable increase in its share price following news that legal proceedings related to a near-explosion at one of its subsidiaries’ facilities are approaching resolution. Shares rose 3.5 percent, gaining 15½ pence to close at 465½ pence.

The legal matter involves GKN Aerospace, a wholly owned subsidiary of Melrose Industries that operates the Garden Grove Facility in California. The company agreed to a $125 million settlement with prosecutors concerning an incident in May when an overheating chemical tank at the plant prompted the evacuation of approximately 50,000 local residents.

The evacuation was carried out as a precautionary measure amid concerns that the overheating tank could lead to an explosion, posing significant risks to public safety. Following the incident, authorities launched an investigation into potential safety violations and operational deficiencies at the facility.

The settlement agreement resolves outstanding legal claims related to the event, although detailed terms have not been publicly disclosed. Melrose Industries declined to comment further on the settlement.

The Garden Grove Facility is a key component of GKN Aerospace’s production network, specializing in advanced aerospace components. The incident had temporarily disrupted operations and raised questions about safety protocols at industrial plants handling hazardous materials.

The case highlights broader regulatory scrutiny within the aerospace manufacturing sector, particularly regarding environmental and community safety standards. Local officials and residents had voiced concerns in the aftermath of the evacuation about the risks posed by nearby industrial facilities.

With the settlement in place, Melrose and its subsidiary can focus on restoring full operations at the Garden Grove plant and addressing public confidence following the event. The resolution also removes a significant legal uncertainty hanging over the company since the May incident.