ABB asbestos settlement given go ahead
A United States bankruptcy court has given Swiss company ABB permission to move forward with its $1.4 billion (SFr1.8 billion) asbestos settlement plan.
The engineering concern said that it could now present its proposal to claimants in the case – which it hopes will be resolved by the end of the year.
The maker of industrial robots and electric motors said in March that it had clinched a deal to settle all outstanding claims, which stem from the company’s purchase of US firms.
Its original plan was thrown out by a US court last year. ABB reworked the plan, adding an extra $232 million to the original package.
A US judge has now allowed ABB to go forward with the new settlement which means that the company can now present the plan to the claimants for approval, said ABB on Friday.
“If they approve it, the plan will go back to the court for confirmation. The confirmation hearing is set for September 29,” it said.
ABB’s chief executive Fred Kindle has said that there was a chance the claims could be resolved by the end of the year.
Company spokesman Thomas Schmidt told the AP news agency on Saturday that the settlement should resolve the asbestos issue once and for all.
He said that he was pretty convinced that the claimants would accept the plan – a majority of 75 per cent is needed for its to pass through. The company’s last settlement proposal was accepted by nearly 100 per cent of claimants before being rejected by a US court.
Asbestos problems
The asbestos problems date back to 1990 when the company acquired its Combustion Engineering subsidiary, which made industrial boilers lined with the cancer-causing substance. Two other divisions in the US also made products containing asbestos.
ABB considers the asbestos claims as one of the final hurdles in its path to financial recovery. The company was on the brink of collapse at the beginning of the millennium due to these cases and crippling debts.
The concern successfully completed its financial turnaround last year after a restructuring drive, returning to profit after three years.
In July ABB reported a first-half net profit of $325 million, more than three times the $90 million for the same period last year.
“Although we took sizeable provisions to improve the longer-term profitability of our transformer business and to cover litigation and regulatory costs, we were able to improve our profitability once more,” said Kindle at the time.
“Our focus remains on improving our business execution quickly and lifting operational efficiency even further,” he added.
swissinfo with agencies
ABB was founded in 1987 after the fusion of the Swedish ASEA and the Swiss BBC Brown Boveri.
In 1990 ABB bought Combustion Engineering (now sold on) which made industrial boilers lined with asbestos.
In the last few years ABB has been confronted with more than 100,000 claims.
Among the claimants are former employees of Combustion Engineering.
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