British American Tobacco's Canadian subsidiary obtains CCAA

(Sharecast News) - Tobacco giant British American Tobacco revealed on Friday that its Canadian subsidiary has obtained protection under the Canadian Companies' Creditors Arrangement Act. British American Tobacco stated that under a confidential court-supervised mediation process, Imperial Tobacco Canada has been negotiating a possible settlement of all of its outstanding tobacco litigation in Canada, while also continuing to run its business in the normal course.

The FTSE 100-listed group noted that the court-appointed mediator's and monitor's plan of compromise and arrangement for ITCAN has now been sanctioned by the Ontario Superior Court of Justice in the ongoing proceedings under the CCAA.

In response to the sanction order, Imperial Tobacco Canada said: "We are pleased that the Court has sanctioned the mediator's and monitor's plan of compromise and arrangement, a critical milestone in the CCAA process.

"While there are still some steps that must be taken to implement the settlement, Imperial Tobacco Canada is committed to continue working with the relevant parties to complete this process as quickly as possible for the benefit of all stakeholders."

BATS said the plan resolved all Canadian tobacco litigation and provided it with "a full and comprehensive release" to ITCAN, BAT and all related entities for all Canadian tobacco claims.

The settlement will be funded by ITCAN's cash on hand and the profits generated from the future sale of tobacco products in Canada.

Tadeu Marroco, BAT chief executive, said: "After six years of negotiation, today's decision is an important step that brings ITCAN closer to emerging from CCAA for the benefit of all stakeholders. Like our Canadian subsidiary, we remain committed to working with all parties to implement the plan, and complete this process."

As of 1115 GMT, BATS shares were up 0.46% at 3,107.30p.

Reporting by Iain Gilbert at Sharecast.com