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Wednesday, 30 January, 2002, 07:34 GMT
ABB doubles asbestos liabilities
An ABB engineer
One US subsidiary faces 94,000 asbestos claims
Swiss-Swedish engineering group ABB has almost doubled the amount of money it is setting aside against liabilities relating to asbestos.

The firm has added an additional charge of $470m (333m), taking its existing asbestos provisions to about $940m, and sending the group into a likely net loss for the past year.

The source of the asbestos liabilities is Combustion Engineering, a US subsidiary that now faces some 94,000 compensation claims in relation to asbestos in products supplied until the mid-1970s.

One analyst recently predicted that ABB's total payouts from asbestos claims could eventually amount to $3bn.

Case load mounts

Combustion Engineering, which ABB acquired in 1990, is currently sifting through the tens of thousands of claims to identify which are valid.

Last year, the company paid out $136m in compensation, and the annual bill is believed likely to rise as the case load mounts.

Asbestos liabilities, most of which date from the early 1970s and before, have become a growing headache for a string of companies, especially in the US.

Dozens of firms - including almost all the producers of asbestos - have already gone bankrupt, and more than 2,000 companies currently face claims for damages.

The Combustion Engineering claims have weighted heavily on ABB's share price, since only a small part of the liabilities are covered by the firm's insurance.

See also:

29 Jan 02 | Business
Asbestos rumours drive shares
16 Jan 02 | Business
ABB asbestos claims 'set to soar'
23 Nov 01 | Business
ABB boss in surprise resignation
24 Oct 01 | Business
ABB issues second profit warning
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