THE COMMERCIAL Court has granted an unprecedented application by a Bermuda-based international medical supplies manufacturer for an order meaning it can effectively hold its $17.8 billion (€12.5 billion) assets here, meaning some good news for the Irish exchequer.
The application by Covidien plc arises from proposed changes in the US tax laws and is expected to be the first of several by other companies similarly concerned about the proposed changes.
Mr Justice Peter Kelly yesterday made orders confirming the transfer of the headquarters and most of the assets of Covidien Ltd, the former parent company of Covidien group, to Covidien plc, which was incorporated here in January last and became the new parent company of the Covidien group on June 4th last.
Covidien Ltd was incorporated in Bermuda and was previously listed on the New York Stock Exchange. The Covidien group manufactures medical devices and supplies, diagnostic imaging agents and pharmaceuticals, had revenues of almost $10 billion in 2008 and has more than 41,000 employees in 59 countries.
The application arises from tax changes proposed by US president Barack Obama and is expected to be the first of several by a number of international companies who are concerned about the implications of the US tax changes.
Paul Sreenan SC, for Covidien, told Mr Justice Kelly a similar application is expected to be brought shortly by Ingersoll Rand with other corporations set to follow suit. The case arose after Covidien Ltd undertook a scheme of arrangement under Bermuda law, under which Covidien plc became the new parent company of the Covidien group and Covidien Ltd became a subsidiary of the Irish-based company. The scheme was approved by shareholders in May and became effective, after supreme court approval in Bermuda, on June 4th last.