James Hardie Tax Appeal Dismissed, Likely To Pay US$168.8 Million

Building products group James Hardie Industries SE (JHX.AU) said Wednesday it has lost an appeal against an Australian tax ruling over its 1998 corporate restructure that is likely to see it be required to pay around US$168.8 million in back taxes.

In a statement, James Hardie said the Federal Court dismissed the appeal by its subsidiary RCI, relating to an amended assessment of tax liability issued by the Australian Taxation Office for the year to March 31, 1999.

James Hardie said it is considering whether it will further appeal the decision but is "likely to be required to record a charge," which it estimated at US$330.4 million as at June 30, 2009.

The company, which paid the ATO A$184 million in settlement of half of the amended assessment in fiscal 2007 pending the appeal outcome, said it will remain in compliance with its debt covenants should a charge be taken.

The company's shares ended down 1.5% at A$5.25 in an overall market up 2.1%.

-By Bill Lindsay, Dow Jones Newswires; 61-2-8272-4694; [e-mail]