BURNABY, BC, October 15, 2008 /CNW/ - Taiga Building Products Ltd.
("Taiga" or the "Company") (TSX: TBL & TBL.NT) announced today that it has
settled its provincial income tax reassessment (the "Reassessment") and agreed
to pay a total amount of $9.6 Million (the "Settlement Amount"). Taiga refers
you to its press releases of May 16, 2007 and May 28, 2008, and other
financial disclosure, for further description.
To date, Taiga has already paid $1.8 Million of the Settlement Amount in
cash and the balance is expected to be paid by October 30, 2008.
As at March 31, 2008, Taiga had already expensed $8.6 Million of the
Settlement Amount in its financial statements and the balance, being
$1.0 Million, will be accounted for in the 2nd fiscal Quarter ended September
The Reassessment was the result of an intra-corporate tax financing
structure arranged and sold by Deloitte and Touche, the Company's advisors and
auditors at the time. Taiga has launched a lawsuit against Deloitte and Touche
for, among other things, breach of contract, breach of fiduciary duty and
professional negligence. Taiga is claiming a return of all costs arising from
the failed plan including in excess of $725,000 paid as contingency fees.
Deloitte and Touche has counterclaimed against Taiga for additional
contingency fees. As a result of the inherent uncertainty of litigation, Taiga
cannot predict the outcome of such actions.
In connection with the Reassessment settlement, Taiga announces a revised
Dividend Policy. Pursuant to the revised policy, the Company intends to pay
dividends on its common shares equal to 25% of the prior fiscal year's Net
Earnings. This revised policy is designed to link dividends more directly to
accomplishment. Taiga will discontinue its current monthly Dividend Payment
Policy of $0.015 per share per month. The last payment will be on October 15,
2008 for the month ended September 30, 2008.
Dividend payments under the revised policy will occur bi-annually on each
July 15th, (or the first business day thereafter) and each January 15th (or
the first business day thereafter) to be paid to the shareholders of record on
June 30th and December 31st (or the first business days thereafter).
In the current fiscal year, Taiga has already distributed in excess of
25% of the prior fiscal year's Net Earnings. Accordingly the first dividend
payment, if any, under the new policy will be on July 15, 2009 and based upon
the fiscal year ended March 31, 2009.
The payment of any dividends by the Company is subject to the discretion
of its board of directors and subject to its determination of the Company's
capital and operational requirements, adequacy of reserves and compliance with
contractual and legal requirements.
The change in dividend policy will, among other things, conserve cash
during this period when the tax Settlement must be paid. Taiga also intends to
consider other sources of new financing to replenish our working capital and
for future operational requirements arising from anticipated slower demand.
This press release contains certain forward-looking information and
statements relating, but not limited, to future events or performance and
strategies and expectations of Taiga. Forward-looking information typically
contains statements with words such as "consider", "anticipate", "believe",
"expect", "plan", "intend", "likely", "may", "will", "should", "predict",
"potential", "continue" or similar words suggesting future outcomes or
statements regarding expectations, beliefs, plans, objectives, assumptions,
intentions or statements about future events or performance. Readers should be
aware that these statements are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those suggested by the forward-looking statements.
These forward-looking statements reflect management's current
expectations or beliefs and are based on information currently available to
Taiga and although Taiga believes it has a reasonable basis for making the
forward-looking statements included in this document, readers are cautioned
not to place undue reliance on such forward-looking information. By its
nature, the forward-looking information of Taiga involves numerous assumptions
and inherent risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts and other
forward-looking statements will not occur. These factors include, but are not
limited to, changes in business strategies; the effects of litigation,
competition and pricing pressures; changes in operational costs; changes in
laws and regulations, including tax, environmental, employment, competition,
anti-terrorism and trade laws; and Taiga's anticipation of and success in
managing the risks associated with the foregoing.
For further information:
For further information: regarding Taiga please contact: Tom Stefan,
Vice President, Finance and Administration, Phone: (604) 438-1471, Fax: (604)