Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: BigBull who wrote (54653)	11/12/1999 5:55:00 PM
From: upanddown	Read Replies (2) of 95453

Bull, the asbestos problem with MDR has little or nothing to do with the patch but strictly the subsidiary Babcock & Wilcox which is the largest maker of industrial boilers in the world. B&W has been a major supplier to utilities for many years. It was founded in 1867 and was an industrial icon on its own for a century. According to the 10-Q the asbestos liability has actually declined since March and is at least 80% covered by insurance. Worst case liability is 1.376B....insurance 1.212B. Maybe cost MDR 100-200M in a worst-case scenario and that to be paid out over many years. Vastly overblown in my opinion. So the liability lawyers make unreasonable claims. B&W then threatens to go to the mattresses. The lawyers, whose main interest are their contingency fees, suddenly get more reasonable. Big deal. MDR made around $200m each of the last two fiscal years, over $3 a share. While admittedly off to a lousy start this fiscal year, Boom2000 could improve things. MDR sells for 500M, around two months sales. When management finesses the asbestos claims, it should quickly return to reasonable value. John

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