Philip Morris Canada Unit in CCAA Protection -- Update

   By Josh Beckerman 
 

Rothmans, Benson & Hedges Inc. (RBH.YY), a Canadian unit of Philip Morris International Inc. (PM), has been granted protection under the Companies' Creditors Arrangement Act.

The company said an initial court order "imposes a comprehensive stay of litigation proceedings against RBH while allowing the company to carry on its business in the ordinary course." The company is authorized to pay employees, vendors and suppliers.

"The CCAA forum provides RBH with a promising opportunity to resolve all the pending litigation we have faced for decades in Canada," the company said.

Earlier this month, Philip Morris International reduced its profit outlook for the year after tobacco companies lost a major legal appeal in Canada on March 1. Late Friday, it revised financial guidance to reflect the deconsolidation of the Canadian business while under CCAA protection.

The exclusion of anticipated Rothmans, Benson & Hedges earnings will have an estimated effect of about 28 cents a share, and a one-time charge of about 10 cents a share is expected in the first quarter.

Last week, British American Tobacco PLC (BATS.LN) unit Imperial Tobacco Canada Ltd. started CCAA proceedings and also filed for chapter 15 protection in the U.S.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

March 22, 2019 20:28 ET (00:28 GMT)

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