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July 5th, 2005
James Hardie, the Australian building firm that has been hitting the headlines repeatedly over recent years for its failure to pay compensation to asbestos victims, has confirmed that it has now set up facilities to get continual cash in order to pay the victims of its asbestos products over the next forty years.
The agreement involves getting funds of around $355 million in order to make the payments to victims who were affected by various products containing asbestos.
James Hardie has turned to six banks to supply the revolving cash flow, and the cash is to be provided for ‘general corporate purposes’ which is to include the payments of compensation to asbestos victims.
The company has agreed to pay thirty-five percent of its free cash flow to the victims of asbestos. As the new compensation plans come into force, James Hardie will get a clearer idea of how much it can pay to asbestos victims each year.
At present the deal is in its very early stages, and still has a long way to go. James Hardie is looking to come to a firm and binding agreement over the coming weeks along with the NSW government and union officials. Once this is done, James Hardie shareholders will need to give final approval on the deal.
"The new debt facilities provide the company with increased financial flexibility and position the company well for its future initiatives," said a James Hardie official.
