W. R. Grace & Co. on April 7 announced an agreement in principle that would settle all present and future asbestos-related personal injury claims. The agreement, reached with the Official Committee of Asbestos Personal Injury Claimants, the Future Claimants Representative and the Official Committee of Equity Security Holders, requires the following assets to be paid into a trust:
Cash in the amount of $250 million;
Warrants to acquire 10 million shares of Grace common stock at an exercise price of $17 per share, expiring one year from the effective date of a plan of reorganization;
Rights to proceeds under Graces asbestos-related insurance coverage;
The value of cash and stock under the litigation settlement agreements with Sealed Air Corp. and Fresenius Medical Care Holdings, Inc.; and
Deferred payments at $110 million per year for five years beginning in 2019, and $100 million per year for ten years beginning in 2024.
"This agreement in principle is a very important step in emerging from Chapter 11," said Fred Festa, Graces Chairman, President and Chief Executive Officer. In this challenging global marketplace, we need to be able to focus all of our efforts on increasing shareowner value and continued improvement in our core businesses. The agreement and the Plan of Reorganization that will be based on it will be good for our shareholders, customers, creditors and our employees. A lot of work remains to be done before we can confirm a Plan of Reorganization, but I am optimistic we will be successful in reaching that goal by the end of this year or early in 2009.
Grace is a global supplier of catalysts and other products to petroleum refiners; catalysts for the manufacture of plastics; silica-based engineered and specialty materials for a wide-range of industrial applications; sealants and coatings for food and beverage packaging, and specialty chemicals, additives and building materials for commercial and residential construction.
