FWC news: Ed, thanks for the heads up. the 11 million is probably delayed, not lost. the asbestos claims are mainly old news, but still a source of concern. i am viewing this dip as a buying op. FWC has dropped sharply several times, and come back strong. larry
WASHINGTON -- Foster Wheeler Corp. (FWC) said it expects to take a
$5 million, or about 12 cents a share, after-tax charge in the second quarter
for its recent sale of two hydrogen production plants in South America.
According to the company's quarterly report for the period ended March
31, filed Monday with the Securities and Exchange Commission, the net
proceeds from the sale were about $40 million.
As reported, Foster Wheeler said the transaction is in accord with its
strategy of selling its generating assets to reduce long-term debt and
concentrating on its core businesses.
Foster Wheeler said it also had a receivable of about $11 million as of
March 31 from Pacific Gas and Electric Co., PG&E Corp.'s (PCG) wholly
owned utility subsidiary, which recently petitioned for protection under
Federal Bankruptcy Laws.
Foster Wheeler said that while it believes the receivable will be collected,
the ultimate timing of the collection is uncertain, and the company has
established an appropriate reserve.
Foster Wheeler also said that about 13,300 new asbestos-related personal
injury claims have been filed against the company in the fist quarter, and
about 2,600 were either settled or dismissed without payment.
The filing said the amount spent on asbestos litigation defense and case
resolution in the quarter was $8.9 million, substantially all of which was
reimbursed or will be reimbursed from insurance coverage.
As of March 30, Foster Wheeler had about 102,800 claims pending, the
filing said.
In addition, the company said that one of the participating insurers in an
agreement with a number of insurers that allows for the handling of claims is
terminating its participation in claims filed after June 12.
As a result, lawsuits have begun in the first quarter among Foster Wheeler
and certain insurers to determine the respective rights and responsibilities
under the policies going forward.
Foster Wheeler said it's in negotiations with the insurers, and believes it will
enter a replacement arrangement to govern allocation of payments on
asbestos-related claims filed after June 12.
The company anticipates that it can continue to manage resolving those
claims without hurting its financial condition.
As reported, a number of companies named as defendants in asbestos
class-action lawsuits have filed for bankruptcy protection in recent months,
including Owens Corning (OWC), Armstrong World Industries Inc. (ACK),
Pittsburgh Corning Co., and G-I Holdings Inc., formerly GAF Corp.
(X.GAF).
Based in Clinton, N.J., Foster Wheeler is a holding company with units that
offer design, engineering, construction, manufacturing, project development
and management, research, plant operations and environmental services.
- Joanne McPike, Dow Jones Newswires; 202-628-7669 |
