New Orleans-based McDermott International Inc. shares climbed Aug. 8 following the company’s announcement of a tentative agreement to assign the entire portion of its equity in the Babcock & Wilcox unit to trusts created for the benefit of all current and future asbestos claims, according to a Dow Jones report.
The energy services company reported it would contribute all applicable insurance proceeds for the one or more trusts and make available 4.75 million shares of restricted McDermott common stock, which would be guaranteed a worth of $19 a share three years from their issuance.
Finalizing the agreement could take up to one year.
The tentative deal would reportedly place the entirety of McDermott’s liability for asbestos claims within its Babcock & Wilcox unit, thereby leaving the company’s pair of other valuable units, J. Ray McDermott and BMX Technologies, protected from any asbestos liability.
Two years ago, the company’s Babcock & Wilcox unit filed for bankruptcy protection citing asbestos litigation.
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