Canadian Court Orders Nova Chemicals to Pay Dow CAD$1.43 Billion Judgment
September 23 2019 - 7:30AM
Business Wire
The Court of the Queen’s Bench in Alberta, Canada, has signed a
judgment ordering Nova Chemicals to pay Dow (NYSE: DOW) CAD$1.43
billion (equivalent to approximately USD$1.08 billion) on October
11, 2019, for damages Dow incurred through 2012 related to the
companies’ jointly-owned ethylene asset in Joffre, Alberta,
Canada.
The court, which initially ruled in June 2018, found that Nova
Chemicals failed to operate the ethylene asset at full capacity for
more than 10 years, and furthermore, that Nova violated several
contractual agreements related to Dow receiving its share of the
asset’s ethylene production. These actions resulted in reduced
productivity and sales for Dow.
The signed judgment relates to damages Dow incurred through
2012. Dow anticipates receiving an additional judgment for damages
owed by Nova for the post-2012 period.
Additionally, the ethylene asset is now running at a higher
utilization rate and giving Dow more ethylene from an advantaged
feedstock position.
The judgment is subject to appeal. Dow expects to record an
accounting gain related to a portion of this judgment in the third
quarter of 2019, which the Company expects to treat as a
significant non-recurring item when calculating non-GAAP financial
measures, including operating earnings per share.
About Dow
Dow (NYSE: DOW) combines one of the broadest technology sets in
the industry with asset integration, focused innovation and global
scale to achieve profitable growth and become the most innovative,
customer centric, inclusive and sustainable materials science
company. Dow’s portfolio of performance materials, industrial
intermediates and plastics businesses delivers a broad range of
differentiated science-based products and solutions for our
customers in high-growth segments, such as packaging,
infrastructure and consumer care. Dow operates 113 manufacturing
sites in 31 countries and employs approximately 37,000 people. Dow
delivered pro forma sales of approximately $50 billion in 2018.
References to Dow or the Company mean Dow Inc. and its
subsidiaries. For more information, please visit www.dow.com or
follow @DowNewsroom on Twitter.
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Rachelle Schikorra +1 (989) 638-4090 ryschikorra@dow.com
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