The Swiss-Swedish engineering giant, ABB, has won approval for its $1.3 billion (SFr1.7 billion) settlement of its asbestos claims.This content was published on July 10, 2003 - 21:03
The decision by a United States bankruptcy court removes another obstacle to ABB's restructuring plans to reduce its massive debt.
The ABB share price rose slightly in Friday trading on the Zurich stock exchange following the announcement.
"We are very happy that the court has agreed to the claim," said Thomas Schmidt, spokesman for ABB.
The ruling is subject to final confirmation from a United States district judge. If and when that happens, the company will be able to put its asbestos liabilities behind it.
Under the settlement, ABB is protected from any future asbestos-related claims. Thursday's decision removes much of the uncertainty surrounding the company's future liabilities, and should enable ABB to sell of its oil, gas and petrochemicals operation to help reduce its $8.2 billion debt.
The deal involves ABB's Combustion Engineering unit, which is facing some 100,000 claims.
ABB originally offered $1.1 billion to settle the case, including $300 million in cash along with the assets of Combustion Engineering, which filed for bankruptcy in February.
The company's CEO, Jürgen Dormann, plans to cut the firm's debt by $4 billion in 2005 and has began a drastic restructuring and cost savings programme, which is expected to eventually lead to some 40,000 job cuts.
Last month, the company reported a first quarter loss of $45 million.
swissinfo with agencies
ABB bought Combustion Engineering in 1990 during a period of rapid expansion.
Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibres could be linked to cancer.
In the 1960s and 1970s, CE made industrial boilers insulated with asbestos.
Over 100,00 people brought claims against the company.
In compliance with the JTI standards