Navistar to Extend Plan to Protect Tax Value of Losses
Neil Abt for TT
Navistar International Corp. will extend a plan to protect the tax value of its net operating losses until Nov. 3.
The truck maker, whose tax benefits from past losses were about $1.7 billion on Oct. 31, created the plan in June to protect against an unintended change in control of the company under federal tax law. Such a change could allow some other company or individual to claim those benefits instead of Navistar.
“Navistar's board of directors has further reviewed and studied the status of the company’s net operating losses and other carry-forwards to determine the alignment of the plan with the best interests of the company,” nonexecutive Chairman James Keyes said in a statement.
The Internal Revenue Code states in Section 382 that a “change in control” happens if holders of more than 5% of its stock trade more than half of the company’s shares over a three-year period.
Since 2011, investors Carl Icahn and Mark Rachesky have each acquired about 15% of Navistar’s shares. Under the plan adopted by the company, they are exempted unless they try to buy more shares.
“There is no guarantee, however, that the plan will prevent the company from experiencing an ownership change, and the company may pursue additional means of protecting this substantial asset,” the statement said.
The plan had been scheduled to expire in September.
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