Dorel Industries Inc. announced that the Luxembourg Administrative Court has confirmed on appeal the previously-announced decision of the Luxembourg Administrative Tribunal that one of Dorel’s wholly-owned subsidiaries owes €54.6 million (euros) in tax (US$64.2 million) including interest. As a result of the judgment of the Luxembourg Administrative Court, Dorel must pay a one-time remaining cash balance of €38.6 million (euros) (US$45.4 million) to the Luxembourg tax authorities.
Dorel expects that the judgment will have an effect of US$1.90 on earnings per share in its financial statements for the third quarter ended September 30, 2021. Dorel will release its results for the third quarter ended September 30, 2021 on November 5, 2021.
As previously announced, the litigation related to taxation on the transfer of certain assets in connection with an internal corporate reorganization that took place in 2015. As such, there is no possibility of further reassessments of Dorel by the Luxembourg authorities with respect to this matter.
“We are extremely disappointed with this judgment. Dorel conducted its affairs in a fully transparent and legal manner, acting with the advice of our tax and legal professionals. As this is a final decision of the Court, we will abide by its decision,” stated Martin Schwartz, Dorel President & CEO.
Dorel Industries Inc., based in Montreal, owns the Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse cycling brands as part of its Dorel Sports segment. It also operates Dorel Juvenile and Dorel Home segments.
