BURNABY, BC, Sept. 12, 2016 /CNW/ - Taiga Building Products Ltd. ("Taiga" or "The Company") (TSX: TBL & TBL.NT) announces that it has received a notice of reassessment from the Canada Revenue Agency (the "CRA") relating to the Company's 2005 to 2013 taxation years (the "Relevant Taxation Years").
The notice of reassessment for the Relevant Taxation Years is consistent with the previously disclosed proposal received by Taiga, which was received in 2015. In issuing the reassessment in the amount of $41 million (which includes interest), the CRA is seeking to increase withholding taxes paid by Taiga in relation to dividends paid or deemed to have been paid to the Company's two largest shareholders in connection with and subsequent to Taiga's corporate reorganization in 2005 involving a swap of then outstanding common shares for stapled units. The Company will be required to either immediately pay the full amount owed or post security.
The Company disagrees with the CRA's proposal and intends to challenge the reassessment and vigorously defend its tax filings and to seek a resolution as soon as practical. Any amounts paid to the CRA in connection with such reassessments would be refunded, plus interest, on a successful appeal of the reassessments.
The Company has formal written agreements with its two major shareholders that fully indemnify it from the above liability and as a consequence, the Company expects that any funds or collateral deposited with the CRA during the dispute and owed in the event of an unsuccessful appeal will be provided by the two major shareholders. Pursuant to the terms of the indemnities, the shareholders may elect to assume any action or defence of Taiga in connection with the foregoing.
This press release contains certain forward-looking information that reflects the current views and/or expectations of Taiga with respect to: Taiga's intention regarding challenging the notice of reassessment; and Taiga's two major shareholders funding the payment requirement to the CRA. The reader is cautioned that statements constituting forward-looking information are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors which are difficult to predict and that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Forward-looking information is based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company operates. Assumptions underlying the Company's expectations regarding forward-looking information contained in this news release include, among others, that: Taiga has sufficient grounds to challenge the notice of reassessment for the Relevant Taxation Years; and the formal agreements Taiga entered into with its two major shareholders to indemnify the Company from the tax liability will be complied with by such shareholders. Investors are cautioned that all forward-looking information involves risks and uncertainties including, without limitation, that: the Company will be unsuccessful in its appeal with the CRA; and other risk factors detailed in our Annual Information Form dated June 17, 2016, available on SEDAR at www.sedar.com and other filings with the Canadian securities regulatory authorities. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements, which are qualified in their entirety by this cautionary statement. Taiga does not undertake any obligations to release publicly any revisions for updating any voluntary forward looking statements, except as required by applicable securities law.
SOURCE Taiga Building Products Ltd.
For further information: regarding Taiga please contact: Mark Schneidereit-Hsu, VP, Finance and Administration and CFO, Phone: 604-438-1471, Fax: 604-439-4242