Navigation

US court approves ABB asbestos deal

ABB's CEO Jürgen Dormann can now focus on his restructuring plan Keystone

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.

Claims

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

Key facts

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.

End of insertion

Articles in this story

In compliance with the JTI standards

In compliance with the JTI standards

More: SWI swissinfo.ch certified by the Journalism Trust Initiative

You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.

Sort by

Change your password

Do you really want to delete your profile?

Your subscription could not be saved. Please try again.
Almost finished... We need to confirm your email address. To complete the subscription process, please click the link in the email we just sent you.

Discover our weekly must-reads for free!

Sign up to get our top stories straight into your mailbox.

The SBC Privacy Policy provides additional information on how your data is processed.