In only 9 days (September 30) the current time-out ("stay") on lawsuits against Canada's 3 large tobacco companies will expire. In only 6 days (September 27th) the Ontario court which is charged with setting the terms (if any) of their insolvency protection will convene to hear a request for another 6 month extention.
Court rules require the documents for this hearing to be made public. Those available to date are linked below:
Companies' motions for extension
- Little information on the negotiations is provided in the report, other than statements that the discussions are continuing "with a view to facilitating a pan-Canadian global settlement of Tobacco Claims"
- The federal government is now among the creditors (as the payments required under a previous settlement have not been paid and as Revenue Canada has assessed an additional $227 million on a previous tax year)
- The companies are making long-term investments in new packaging and distribution equipment.
- ITL is expanding the number of VUSE stores in Canada from 4 to 9 by the end of the year.
- ITL is shifting its source of fine-cut tobacco from Mexico to Germany and Hungary.
- RBH will shift 25% of its production to to Mexico
- Rothmans plans to launch a vapour-based product in Canada this fall ("Veev, starting in the fall and gradually rolling it out nationally, region by region.")
- JTI has signed a long-term (6 year) collective agreement with its workers, and is shifting some operations to the Philippines.
- The Quebec class action lawyers objected to Imperial Tobacco's intention to pay $55 million to BAT operations in Mexico related to the undepreciated cost of manufacturing equipment that will no longer be requird by ITL as a result of new plain packaging requirements
- Because it raised prices, Imperial Tobacco generated slightly more revenue than it had expected, even though sales volumes were down (by an unspecified amount). It's gross revenues (less tobacco taxes) for the period were 876 million, and its net revenues for the half year were $400 million.
- Rothmans, Benson and Hedges' sold more cigarettes than it expected, with revenues (less tobacco taxes) were $876 million, from which it retained $466 million.
- JTI-Macdonald's revenues (after tobacco taxes) were $617 million, of which $124 million was retained.
- During the 6 month period, ITL spent $3.5 million on professional fees, RBH spent $2.7 million on 'restructuring costs' and JTIM spent $3.5 on legal and accounting services.
- For the past 30 months, the companies have not been permitted to send their profits to the multinational owners. Each company has to report on the amount of cash that is available to creditors. As of September 2021, RBH has $3.5 billion available, Imperial Tobacco has $2.2 billion available and JTIM has $694 million set aside.