Bengaluru — British American Tobacco (BAT) said on Tuesday it would set aside £436m ($573.65m) in 2019, after a Quebec court upheld a 2015 decision that awarded smokers in the Canadian province about C$15bn ($11.29bn).
BAT said its Canadian unit was required to place about £436m in escrow as part of the 2015 decision. The deposit, which was held as an asset on BAT’s balance sheet at the end of 2018, will now be charged as an adjusting expense in 2019, BAT said.
It also said there will be no impact from the charge to adjusted net debt to adjusted ebitda (earnings before interest, tax, depreciation and amortisation) ratio or to 2019 cash flow.
Canadian subsidiaries of BAT, Philip Morris International and Japan Tobacco International, are appealing a 2015 Quebec superior court ruling to award damages to about 100,000 Quebec smokers and former smokers who allege the companies knew since the 1950s that their product was causing cancer and other illnesses and failed to warn consumers adequately.
Imperial Tobacco Canada has said it plans to appeal the judgment to Canada’s supreme court.
BAT, which was not a party to the proceedings and not a party to the judgment, has said it will decide on the next steps in the coming days and weeks.
BAT shares were seen down as much as 2% in premarket indicators.
Reuters
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