Universal Corporation Reports EU Court Decision
Universal Corporation (NYSE: UVV) announced that earlier today the General Court of the European Union issued a decision rejecting the appeal of Deltafina, S.p.A, its Italian subsidiary. That appeal related to the European Commission's revocation of Deltafina's immunity from a penalty of EUR 30 million (about $41 million on September 9, 2011) assessed against Deltafina and the Company jointly for actions in connection with Deltafina's purchase and processing of tobacco in the Italian raw tobacco market between 1995 and 2002.
The Company and Deltafina are reviewing the decision and will evaluate whether to file an appeal. At this time, it is likely that the Company will accrue a charge for the fine and related interest in the quarter that will end on September 30, 2011. That amount, as of September 9, 2011, is estimated at approximately $49 million at current market exchange rates.
George C. Freeman, III, the Company's Chairman, President, and Chief Executive Officer, said today, "Today's decision by the Court will have no impact on our tobacco operations in Europe or elsewhere. We are surprised and disappointed by the Court's decision. We continue to assert that Deltafina kept the Commission fully informed of its actions and fulfilled the Commission's requirements for maintaining its immunity. The Commission benefited from Deltafina's continued cooperation for two years, before notifying us in December 2004 of its intent to revoke Deltafina's immunity."
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