Hanson to pay pounds 168m to end US site contamination row
Thursday 06 August 1998
The company, formed from the break-up of the conglomerate last February, will pay the sum as a one-off premium to two insurers which will guarantee up to pounds 488m to cover Hanson's clean-up costs at over 100 contaminated sites in the US.
The deal puts an end to a long-running saga which has cast a cloud of uncertainty over the company's finances for the past seven years. The building materials producer inherited the sites when it bought the housebuilder Beazer in 1991, when Hanson was still part of the huge group headed by Lord Hanson.
As part of the pounds 350m deal, Hanson agreed to take on all liabilities arising from the contamination of land by Koppers, a chemical company then owned by Beazer. The firm had been prosecuted by the US Environmental Agency (EPA) for leaking dangerous chemicals on 119 sites in the US.
Under yesterday's deal with the reinsurers Centre Solutions - part of the Swiss giant Zurich - and Swiss Re, Hanson will pay the first $100m (pounds 61m) of the clean-up costs, with the insurers covering the rest of the liability up to pounds 488m. Hanson said it was confident that the cover, which has an unlimited timescale, would be more than enough to pay for any liability arising from the dispute.
Provision for the clean-up costs was initially thought to be in excess of $2bn, but it was later scaled down to $675m (pounds 412m) to reflect a less confrontational attitude from the EPA.
Hanson said yesterday that after allowing for the pounds 168m premium and for minor ongoing costs for staff and legal fees, pounds 67m of the provision would no longer be required. The sum would be credited to the next set of accounts, together with a pounds 73m gain from the settlement of related legal disputes.
Andrew Dougal, the chief executive, said the deal would help the company on the completion of a number of acquisitions of US building materials companies. "They will not be old-Hanson flamboyant-style acquisitions, they will be small, focused buys," he said, adding that the company would be announcing details of a deal "very shortly".
The stock market signalled its approval of the insurance agreement by marking Hanson shares 13p higher to 336p in spite of a sharp fall in the overall index.
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