British American Tobacco’s Canadian unit won court protection from creditors, becoming the second major tobacco company to seek relief. Picture: Adnan Abidi / Reuters

INTERNATIONAL - British American Tobacco’s Canadian unit won court protection from creditors, becoming the second major tobacco company to seek relief after a legal defeat over the risks of smoking. 

BAT’s Imperial Tobacco Canada was granted protection by the Ontario Superior Court, the company said in a statement on Tuesday. The decision lets the unit continue operating its businesses normally, and follows a similar move by Japan Tobacco’s JTI-Macdonald unit last week. BAT shares fell 1.5percent on Wednesday morning in London. 

The Canadian units of BAT, Japan Tobacco and Philip Morris International were ordered earlier this month to pay damages estimated at about $10 billion (R143bn) after losing an appeal of class actions filed by Quebec smokers seeking damages. 

BAT had said last week that the ruling would hit its profit and set aside R8.18bn to cover damages. Imperial Tobacco Canada said its share of the judgment amounts to as much as R99.36bn. The company said if it had not obtained court protection, it could have been required to pay all or part of JTI-Macdonald’s share in addition to its own. 

- BLOOMBERG