Honeywell International HON has entered into a definitive agreement with the North American Refractories Asbestos Personal Injury Settlement Trust to settle claims over its manufacture of products containing asbestos in the past, per an SEC filing.
Subject to the terms of the agreement, Honeywell will make a one-time payment of $1.325 billion to the trust to release itself from further funding obligations to the latter. Once the deal is complete, HON will have “limited obligations” to the trust.
Honeywell had purchased North American Refractories Company (“NARCO”), an asbestos refractory materials manufacturer, in 1979. Given the carcinogenic impact of asbestos exposure, HON found itself embroiled in several asbestos-related lawsuits, thanks to its subsidiary’s operations. The NARCO unit filed for bankruptcy and established a trust fund of $6.32 billion in 2013 to settle asbestos claims.
Honeywell International Inc. Price
Honeywell International Inc. price | Honeywell International Inc. Quote
Honeywell’s deal with the trust is subject to a final order from the US Bankruptcy Court. HON said that NARCO’s reserve of $695 million would be removed from its balance sheet and a charge will be recognized once the deal is approved.
Honeywell has reaffirmed fourth-quarter 2022 and full-year guidance as it does not expect the accounting impacts of the agreement to affect its financial statements in the ongoing year.
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