RHI sees payment claims related to US Chapter 11 proceedings (ad hoc)

07. August 2003

In early 2002, RHI initiated the split from all its refractories companies in the USA due to asbestos-related problems. These companies were deconsolidated at December 31, 2001, and RHI successfully implemented the required capital restructuring.

As a result of the steps taken by the US management, North American Refractories Co. (NARCO) and Global Industrial Technologies Inc. (GIT) have been operating under Chapter 11 and reorganization proceedings since 2002. On July 31, 2003 the plans of reorganization (PoR) for the NARCO and GIT groups were filed with the court in Pittsburgh. Thus another important step has been taken towards completing the Chapter 11 proceedings successfully.

RHI and the parties involved in the Chapter 11 proceedings are reviewing the legal and economic implications of the plans.

From RHI’s viewpoint, the submitted reorganisation plans give rise to direct payment claims against Honeywell and Halliburton resp. its subsidiary Dresser Industries Inc. (now DII), totaling USD 55m, which had been agreed individually with the above mentioned former owners early 2002.

While Honeywell is willing to honour the agreement – although it still has some concerns regarding the plans in detail – Halliburton has already announced that it has no intention of paying. Since, in RHI’s view, all the conditions have been fulfilled to make the amounts payable, legal action will be brought against Halliburton resp. Dresser to collect the due installment of USD 35m.