Halliburton Caps Claims on Asbestos

Halliburton Co. said Thursday that it reached an agreement to limit its cash required to settle asbestos lawsuits to $2.78 billion, delaying bankruptcy filings for two of its units.

The settlement, which must be approved by 75% of the known asbestos claimants, is conditioned on a Chapter 11 filing for protection from creditors for the units, DII Industries and Kellogg Brown & Root, on or before Dec. 31.

DII and KBR, the company’s engineering and construction subsidiary that has drawn much attention for its U.S. government contracts in Iraq, have been involved in asbestos litigation and the bankruptcy filing would help put Halliburton’s asbestos problems to rest.

The world’s second-largest oilfield services company said a Nov. 19 deadline for creditors to approve the prepackaged bankruptcy filing would be extended to allow time to receive acceptances for the terms.

Halliburton, once led by Vice President Dick Cheney, said it had negotiated multiple credit facilities with several of its banks and nonbank lenders to fund the proposed settlement.

Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. are the co-lead arrangers of the facilities.

The facilities include a $700- million, three-year revolving credit facility and a $1-billion delayed-draw term facility.

Halliburton last year agreed to an asbestos settlement, but the deal has been delayed as more claimants step forward.

Asbestos was widely used until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases.

Halliburton shares fell 25 cents to $24.10 on the New York Stock Exchange.