ABB gets final approval for asbestos deal
Swiss-Swedish engineering giant, ABB, has been given the final go-ahead for a $1.3 billion (SFr1.8 billion) settlement of its asbestos claims.
The approval from a United States district court could pave the way for ABB’s sale of its oil, gas and petrochemicals unit and help the company reduce its mountain of debt.
“The decision confirms that the settlement reached between ABB and the claimants was fair,” ABB said in a statement.
Following the news, ABB’s share price jumped more than ten per cent, closing at SFr6.60 on Friday.
Although a US bankruptcy court approved the settlement at the beginning of July, the deal required final approval from the district court.
The settlement protects ABB from any further asbestos-related claims.
Health risks
ABB faces claims from over 100,000 people suffering from the effects of asbestos, which has been found to cause cancer, among other diseases.
The claims centre on its now bankrupt Combustion Engineering business, which made industrial boilers insulated with asbestos, until the health risks from inhaling the substance became clear.
ABB has been trying to sell its oil, gas and petrochemicals business, valued at over $1 billion, to help reduce its $8.3 billion pile of debt to $6.5 billion by the end of the year.
There has been little interest in the unit as long as no settlement had been reached – as the business was also affected by asbestos claims.
A lawyer representing creditors who opposed the deal said they would appeal the ruling.
He also warned that the asbestos risk associated with ABB’s oil, gas and petrochemicals business remained.
But ABB’s lawyer said this was not the case.
swissinfo with agencies
The ruling shields ABB from further asbestos-related claims.
ABB’s stock jumped by more than 10% on Friday, to close at SFr6.60.
The settlement paves the way for ABB to sell off its oil, gas and petrochemicals unit, valued at about $1 billion.
ABB hopes to reduce its debt from $8.3 billion to $6.5 billion by the end of the year.
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