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Xerium to settle tax woes through Brazilian amnesty scheme

22 Aug '14

2 min read

In order to settle its outstanding Brazilian tax litigation matter, NYSE-listed Xerium Technologies, Inc., a US-based provider of industrial consumable products and services, will join a tax amnesty program in Brazil.

Xerium said taking part in the amnesty program will result in a third quarter tax charge of around $25.1 million.

The amount of the tax charge represents the settlement of the company's open tax assessment and the cost to settle the un-assessed tax years of 2011 to the present.

The tax charge will not impact the company's third quarter or full year adjusted EBITDA figure, Xerium informed in a press release.

Commenting on tax amnesty program, CFO at Xerium Clifford Pietrafitta said, "We still believe the transactions that resulted in this tax assessment were executed legally and that we had a strong case.

“However, given the uncertainty inherent in litigation, particularly the length of time and the very real cost associated with continuing to fight it, we felt this option represented the best opportunity in the foreseeable future to mitigate our risk and to put this issue behind us."

Xerium will finance the settlement by drawing an additional $30 million of debt financing under the accordion feature of its term loan credit facility.

Xerium Technologies with 27 manufacturing facilities in 12 countries around the world, Xerium has approximately 3,200 employees and utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production.

Fibre2fashion News Desk - India