USG makes last payment to asbestos trust
USG Corp. said Thursday it made a final payment of $3.05 billion into its asbestos personal injury trust, ending the building materials maker's financial obligations under a settlement announced in January 2006.
HOUSTON (Reuters) -- USG Corp. said Thursday it made a final payment of $3.05 billion into its asbestos personal injury trust, ending the building materials maker's financial obligations under a settlement announced in January 2006.
Under terms of the Chicago-based company's bankruptcy reorganization plan, USG agreed to make three payments totaling $3.95 billion to a trust that will compensate asbestos personal injury victims.
The first payment of $900 million was made on June 20. USG said it combined the last two payments due into a single payment of $3.05 billion to maximize the 2006 deductions needed for a $1.1 billion federal tax refund it expects in 2007.
"We are optimistic about USG's future and look forward to continued success implementing our strategic plans, unencumbered by asbestos liabilities," USG Chairman and Chief Executive William Foote said in a statement.
The trust payment was funded using cash on hand, proceeds from a $500 million senior note offering and borrowings. The $1.1 billion federal tax refund will be used to help repay the borrowings, USG said.
USG, which emerged from bankruptcy on June 20, also said it has adopted a new shareholder rights plan that has a 15 percent share ownership trigger.
The new plan will replace one that had a 5 percent trigger and was adopted in connection with the company's emergence from Chapter 11 bankruptcy.
As part of an existing agreement, Berkshire Hathaway Inc. (Charts), which backstopped the $1.8 billion rights offering that USG completed in August, may acquire up to 40 percent of USG's shares through August 1, 2013, without triggering the rights plan.
Shares of USG (down $0.36 to $54.48, Charts) edged down to close at $54.48 on the New York Stock Exchange Thursday.