Halliburton to Settle All Asbestos Claims

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Reuters

Halliburton to settle all Asbestos Claims

Wednesday December 18, 2:32 pm ET

HOUSTON (Reuters) - Halliburton Co. (NYSE:HAL - News) said on

Wednesday it had

reached agreement in principle to settle hundreds of thousands of

personal

injury asbestos claims by paying more than $4 billion in cash and

stock.

The settlement, one of the largest involving asbestos, which causes

cancer and

other diseases, covers all present and future asbestos claims, the

company

said.

A deal had been expected after Houston-based Halliburton, one of the

world's

largest providers of oil field services and once headed by Vice

President Dick

Cheney, said earlier this month it was near an agreement with

plaintiffs'

attorneys representing more than 300,000 claimants.

The settlement will involve a prepackaged Chapter 11 bankruptcy

protection

filing by two subsidiaries of Halliburton.

" If this transaction is completed, it will resolve a major issue that

has been

clouding our future, " said Dave Lesar, chairman and chief executive

officer of

Halliburton.

Asbestos was widely used for fireproofing and insulation until the

1970s, when

scientists concluded that inhaled fibers could be linked to cancer

and other

diseases.

The settlement was reached in a U.S. bankruptcy court case in

Pittsburgh and is

to be executed through a prepackaged Chapter 11 bankruptcy code filing

involving DII Industries, Kellogg Brown & Root, which are

subsidiaries of

Halliburton, and some other operations.

But parent company Halliburton Co., Halliburton Energy Services, Inc.

and most

Halliburton subsidiaries will be excluded from the bankruptcy filing.

No job cuts will result from the deal and all salaries and benefits

will remain

the same, the company said.

Under the agreement, Halliburton said it will pay up to $2.775

billion in cash

and 59.5 million shares of Halliburton stock, which has a current

market value

of about $1.2 billion. It will also pay notes in amounts to be

determined, but

with a net present value expected to be less than $100 million.

Halliburton shares rose 40 cents, or 2 percent, to $20.75 on the New

York Stock

Exchange.

Final agreement is subject to resolving various issues, including

financing,

Halliburton board approval and final court approval, the company

said.

The settlement caused Moody's to put Halliburton ratings under review

for

possible downgrade. Ratings under review include Halliburton senior

unsecured

debentures, notes, and medium-term notes rated Baa2.

The agreement remains subject to financing, board approval, and court

approval,

as well as the approval of at least 75 percent of asbestos claimants.