StockMarketWire.com - British American Tobacco said Tuesday it would take a roughly £436m hit after it failed to win an appeal against a claim by smokers in Quebec.

The Court of Appeal had upheld the trial court's decision of May 2015, including the previously stated requirements for the company’s subsidiary Imperial Tobacco Canada to deposit approximately CAD1.1bn into a court escrow account.

As part of the 2015 decision, Imperial Tobacco Canada was required to place CAD758m (approximately £436m) in escrow - the final payment of which was made in 2017.

This deposit was held as an asset on the Group's balance sheet at the year ended 31 December 2018.

But following the 1 March 2019 judgment, Imperial Tobacco Canada had determined that the asset's recoverability was less than 'virtually certain.' As a result a provision of approximately £436m would be charged to the group's consolidated income statement in 2019.

There would be no impact from this charge to the ratio of adjusted net debt to adjusted EBITDA, with this decision having no impact to cash flow in 2019,' British American Tobacco said.

'The Board of Directors of ITCAN and the Group are monitoring developments. As previously stated, ITCAN intends to seek leave to appeal this judgment to the Supreme Court of Canada,' it added.


At 8:46am: [LON:BATS] British American Tobacco PLC share price was +31.5p at 2903p



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